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Informist, Wednesday, Oct. 30, 2024

By Sandeep Sinha

MUMBAI – Futures contracts of gold hit lifetime highs on the Multi Commodity Exchange of India and COMEX on Wednesday as investors sought safety in gold's safe-haven appeal ahead of the US presidential election next week. The positive sentiment was further aided by festive demand in India.

"Gold's record-breaking rise continues ahead of the US election, seen as a major risk event that could trigger a market reaction, especially if results differ from expectations of a Trump victory," Ole Hansen, head of commodity strategy at Saxo Bank, said in a note. "Gold is up 5% this month and 34% on year, second only to silver, which has surged 42.3%. These rallies prompt concern over potential unsustainable gains and a possible peak".

At 1800 IST, the most-active December GOLD contract on the MCX was up 0.3% at INR 79,500 per 10 gm. The December contract hit an all-time high of INR 79,775 intraday Wednesday. The most-active December contract on COMEX was up 0.3% at $2,790.50 per ounce. It hit a fresh lifetime high of $2,801.70 earlier in the day. The highest call open interest for gold was at the INR 78,000 strike price, suggesting a bullish view. The highest put open interest was at the INR 75,000-INR 74,000 strike for the Nov. 26 gold contract.

Hansen said gold and silver are currently showing no euphoria—only strong rallies amid investors' concerns over fiscal instability, safe-haven demand, geopolitical tensions, de-dollarisation driving strong demand from central banks, and Chinese investors turning to gold amid record-low savings rates.

Investors will take further cues from US GDP for Jul-Sept and Automatic Data Processing non-farm employment change data later in the day, and the September non-farm payrolls data scheduled Friday.

However, the further upside in the yellow metal was limited due to outflows of gold exchange-traded funds. On Tuesday, the gold holdings of SPDR Gold Trust, the world's largest gold-backed ETF, fell 1.72 tonnes to 889.78 tonnes. The fund has a market value of $79.19 billion.

SILVER prices fell, taking cues from the COMEX, and profit-taking at higher levels. At 1820 IST, the most-active December contract of silver on the MCX was down 0.6% at INR 98,190 per kg. The same-month contract on COMEX was 0.7% lower at $34.22 per ounce.

The MCX Bulldex, an index that tracks the real-time performance of gold and silver futures on the MCX, was up just 15 points at 19860 points. As of 1823 IST, the December and February gold contracts recorded turnovers of INR 23.01 billion and INR 3.62 billion, respectively, on the MCX. The December and March silver contracts saw turnovers of INR 23.22 billion and INR 1.62 billion, respectively.

The spot gold-silver ratio, also known as the Mint ratio, rose to 81.69, indicating that gold had outperformed silver. The ratio measures the ounces of silver required to buy an ounce of gold. The ratio was 80.46 on Tuesday.

Outlook for the rest of the session:

--MCX gold seen at INR 79,000–INR 80,000 per 10 gm

--COMEX gold seen at $2,750.00–$2,810.00 an ounce

--MCX silver seen at INR 97,500-INR 99,800 per kg

--COMEX silver seen at $33.90-$34.50 an ounce

End

US$1 = INR 84.08

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

Edited by Tanima Banerjee

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