India Bullion
Gold down on profit-taking, reduced hope of 50 bps cut by Fed
This story was originally published at 20:01 IST on 25 October 2024
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By Sandeep Sinha
MUMBAI – Futures contracts of gold fell on the Multi Commodity Exchange of India and COMEX today because of profit-taking. The strong economic data in the US also lowered the chances of a 50-basis-point interest rate cut by the US Federal Reserve at its November meeting, which also weighed on the safe-haven appeal of the yellow metal.
The US flash composite purchasing managers’ index rose to a two-month high of 54.3 in October from 54.0 in September, according to a preliminary report published by S&P Global on Thursday. The US Labour Department data released on Thursday showed that the number of citizens claiming jobless benefits fell by 15,000 to 227,000 in the week ended Oct. 19 against analysts’ expectation of 245,000 polled by Dow Jones.
According to the CME FedWatch tool, markets are now pricing in a nearly 96% chance of the Fed cutting interest rates by 25 basis points at its November meeting and over 75% expect the possibility of another 25-basis-point cut at the December meeting.
"Gold futures are trading slightly lower on profit-booking after prices scaled past $2,750 per ounce earlier in the week. However, the bullion is likely to close the week in positive, amid support from safe-demand, ETF buying, uncertain US election outcome, and rising bets for aggressive rate cuts from global central banks," Pranav Mer, vice-president research commodity and currency at BlinkX and JM Financial, said in a note.
At 1813 IST, the most-active December GOLD contract on the MCX was down 0.2% at INR 78,157 per 10 gm. The most-active December contract on the COMEX was 0.3% lower at $2,741.40 per ounce. The highest call open interest for gold was at the INR 78,000-80,000 strike price, suggesting a bullish view. The highest put open interest was at the INR 74,000 strike for the Nov. 26 gold contract.
On Thursday, the gold holdings of SPDR Gold Trust, the world's largest gold-backed ETF, remained steady at 893.80 tonnes. The fund has a market value of $78.49 billion.
SILVER prices fell, taking cues from COMEX, and negative trends in gold and base metals. At 1817 IST, the most-active December contract of silver on the MCX was down 0.4% at INR 96,675 per kg. The same-month contract on COMEX was 0.3% lower at $33.66 per ounce.
The MCX Bulldex, an index that tracks the real-time performance of gold and silver futures on the MCX, was up 114 points at 19671 points. As of 1826 IST, the December and February gold contracts recorded turnovers of INR 22.05 billion and INR 1.80 billion, respectively, on the MCX. The December and March silver contracts saw turnovers of INR 27.79 billion and INR 1.37 billion, respectively.
The spot gold-silver ratio, also known as the Mint ratio, rose to 81.51, indicating that gold had outperformed silver. The ratio measures the ounces of silver required to buy an ounce of gold. The ratio was 79.32 on Thursday.
Outlook for the rest of the session:
--MCX gold seen at INR 77,600–INR 78,300 per 10 gm
--COMEX gold seen at $2,722.00–$2,762.00 an ounce
--MCX silver seen at INR 95,000-INR 97,300 per kg
--COMEX silver seen at $32.88-$34.55 an ounce
End
US$1 = INR 84.08
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Manisha Baxla
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