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Informist, Monday, Oct. 14, 2024

By Sandeep Sinha

MUMBAI – Futures contracts of gold rose to a new lifetime high on the Multi Commodity Exchange of India Monday, but a rebound in the dollar erased the gains and turned the prices negative. A firm dollar makes commodities priced in the greenback expensive for holders of other currencies, dulling the demand for bullion.

At 1750 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was up 0.2% at 103.17. Investors continue to assess the uncertainty relating to the US Federal Reserve interest rate trajectory after the latest inflation report.

"Gold prices consolidating previous sessions' gains as market participants look for fresh cues i.e. incoming data/ developments in the West Asia/ strong physical demand at Asian trading centres due to festive season, etc," Pranav Mer, vice-president research commodity and currency at BlinkX and JM Financial, said in a note. "Focus this week will be incoming data from China, inflation numbers from the UK/ Euro zone, European Central Bank monetary policy and US data on retail sales/ housing market, etc," he said.

At 1750 IST, the most-active December GOLD contract on the MCX was down 0.3% at INR 76,105 per 10 gram. The contract hit a new all-time high of INR 76,467 earlier in the day. The most-active December contract on COMEX was 0.3% higher at $2,668.2 per ounce. The highest open interest in call options was at the INR 76,000-77,000 strike price, suggesting a bullish view, while the highest open interest in put option was at INR 73,000 strike for the Nov. 26 gold contract.

However, the fall in the price of the precious metal was limited by fresh inflows into gold exchange-traded funds. Gold holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose by 1.72 tonne to 877.98 tonne. The fund has a market value of $74.74 billion.

SILVER prices fell taking cues from COMEX and negative trends in gold and base metals. At 1755 IST, the most-active December contract of silver on the MCX was down 0.9% at INR 90,908 per kg. The same-month contract on COMEX was 1.1% lower at $31.42 per ounce.

The MCX Bulldex, an index that tracks the real-time performance of gold and silver futures on the MCX, was down by 31 points at 18900 points. As at 1758 IST, the December and February gold contracts recorded turnovers of INR 17.71 billion and INR 1.26 billion, respectively, on the MCX. The December and March silver contracts saw turnovers of INR 16.97 billion and INR 1.01 billion, respectively.

The spot gold-silver ratio, also known as the Mint ratio, rose to 85.03, indicating that gold has outperformed silver. The ratio measures the ounces of silver required to buy an ounce of gold. The ratio was 84.26 on Friday.

Outlook for the rest of the session:

--MCX gold seen at INR 75,800–INR 76,600 per 10 gm

--COMEX gold seen at $2,632.50–$2,687.05 an ounce

--MCX silver seen at INR 89,800-INR 91,800 per kg

--COMEX silver seen at $31.03-$31.96 an ounce

End

US$1 = INR 84.06

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Ashish Shirke

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