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Informist, Tuesday, Oct. 15, 2024

By Sandeep Sinha

MUMBAI – Futures contracts of gold rose on the Multi Commodity Exchange of India and COMEX Tuesday because of a weak dollar, which makes commodities priced in the greenback cheaper for holders of other currencies. The positive sentiment was aided by sharp inflows in exchange-traded funds.

At 1800 IST, the dollar index, which measures the strength of the greenback against a basket of major currencies, was down 0.1% at 103.13. For further cues, investors await speeches from US Federal Open Market Committee members Mary Daly and Adriana Kugler later Tuesday.

On Monday, gold holdings of SPDR Gold Trust, the world's largest gold-backed ETF, rose by 2.59 tonnes to 880.57 tonnes, the highest level since Dec. 28. The fund has a market value of $75.13 billion.

"The fact that gold price came under pressure only briefly and has since recovered most of its losses is likely due to the increased geopolitical risks in West Asia (Middle East)," Carsten Fritsch, commodity analyst at Commerzbank, said in a note to clients. "As a non-interest-bearing investment, gold benefits not only from expectations of interest rate cuts, but also from its safe-haven status."

At 1813 IST, the most-active December GOLD contract on the MCX was up 0.1% at INR 76,145 per 10 gm. The most-active December contract on COMEX was 0.3% higher at $2,672.3 per ounce. The highest open interest in call options was at the INR 77,000 strike price, suggesting a bullish view, while the highest open interest in put options was at INR 73,000 strike for the Nov. 26 gold contract.

"Despite the volatility, the overall trend in gold remains positive, supported by a weakening dollar and safe-haven demand," Jateen Trivedi, vice-president and research analyst at LKP Securities, said in an email note. Traders may continue to look for buying opportunities on dips, particularly with global uncertainties driving sentiment, he said.

SILVER prices on the domestic exchange traded slightly lower owing to weak cues from industrial metals. At 1817 IST, the most-active December contract of silver on the MCX was down 0.1% at INR 90,587 per kg. The same-month contract on COMEX was flat at $31.30 per ounce.

The MCX Bulldex, an index that tracks the real-time performance of gold and silver futures on the MCX, was up just 10 points at 18888 points. As at 1825 IST, the December and February gold contracts recorded turnovers of INR 27.41 billion and INR 1.88 billion, respectively, on the MCX. The December and March silver contracts saw turnovers of INR 20.32 billion and INR 1.23 billion, respectively.

The spot gold-silver ratio, also known as the Mint ratio, rose to 85.58, indicating that gold has outperformed silver. The ratio measures the ounces of silver required to buy an ounce of gold. The ratio was 84.98 on Monday.

Outlook for the rest of the session:

--MCX gold seen at INR 75,700–INR 76,500 per 10 gm

--COMEX gold seen at $2,655.80–$2,690.50 an ounce

--MCX silver seen at INR 90,000-INR 91,400 per kg

--COMEX silver seen at $30.95-$31.79 an ounce

End

US$1 = INR 84.03

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

Edited by Rajeev Pai

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