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Informist, Thursday, Oct. 17, 2024

By Sandeep Sinha

MUMBAI – Futures contracts of gold hit a new all-time high of INR 77,019 per 10 gm in intraday trades Thursday on the Multi Commodity Exchange of India, taking cues from COMEX, as investors sought safety in bullion in the face of increased global uncertainties.

Investors have been worried by the uncertainty of the outcome of the US presidential election in November and the continuing geopolitical tensions in West Asia. Positive sentiment in the yellow metal was also lifted by expectations of an interest rate cut by the US Federal Reserve at its meeting right after the presidential election.

"With only three weeks until the US presidential election, investors are increasingly seeking haven assets such as precious metals," Daniel Hynes, senior commodities strategist at ANZ Research, said in a note. "Polls suggest the contest is still too close to call, creating uncertainty among investors. Haven buying has also been driven by increasing geopolitical risks amid elevated tensions in the Middle East."

At 1748 IST, the most active December GOLD contract on the MCX was up 0.2% at INR 76,778 per 10 gm. The most active December contract on COMEX was 0.1% higher at $2,693.9 per ounce. The highest call open interest for gold was at the INR 77,000 strike price, suggesting a bullish view. The highest put open interest was at the INR 74,000 strike for the Nov. 26 gold contract.

The European Central Bank Thursday lowered its benchmark interest rate by 25 basis points. The interest rate on deposit facility, main refinancing operations, and marginal lending facility decreased to 3.25%, 3.40%, and 3.65%, respectively, the ECB's release said. According to the CME FedWatch tool, markets are now pricing in over 94% chance of the Fed also cutting interest rates by 25 bps at its November meeting.

On Wednesday, the gold holdings of SPDR Gold Trust, the world's largest gold-backed ETF, remained steady at 884.59 tonnes. The fund has a market value of $76.05 billion.

SILVER prices marginally fell, taking cues from COMEX, and a negative trend in base metals. At 1805 IST, the most active December contract of silver on the MCX was down 0.1% at INR 92,054 per kg. The same-month contract on COMEX was 0.2% lower at $31.92 per ounce.

The MCX Bulldex, an index that tracks the real-time performance of gold and silver futures on the MCX, was up just 21 points at 19039 points. As of 1810 IST, the December and February gold contracts recorded turnovers of INR 24.61 billion and INR 1.79 billion, respectively, on the MCX. The December and March silver contracts saw turnovers of INR 26.80 billion and INR 1.11 billion, respectively.

The spot gold-silver ratio, also known as the Mint ratio, rose to 84.49, indicating that gold had outperformed silver. The ratio measures the ounces of silver required to buy an ounce of gold. The ratio was 84.05 on Wednesday.

Outlook for the rest of the session:

--MCX gold seen at INR 76,600–INR 77,100 per 10 gm

--COMEX gold seen at $2,678.00–$2,704.00 an ounce

--MCX silver seen at INR 91,400-INR 92,800 per kg

--COMEX silver seen at $31.74-$32.20 an ounce

End

US$1 = INR 84.07

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

Edited by Rajeev Pai

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