More Stories

Informist, Tuesday, Nov. 5, 2024

By Sandeep Sinha

MUMBAI – Futures contracts of gold rose on the Multi Commodity Exchange of India and the COMEX Tuesday because of a weak dollar, which makes commodities priced in the greenback cheaper for holders of other currencies. The positive sentiment was lifted by safe-haven demand as poll data suggest a tight race between Republican candidate Donald Trump and Democrat nominee Kamala Harris and short-covering of positions by traders.

At 1800 IST, the dollar index, which measures the strength of the greenback against a basket of major currencies, was down 0.2% at 103.72. For further cues, investors await a speech by European Central Bank President Christine Lagarde, US S&P global services purchasing managers’ index and Institute of Supply Management manufacturing purchasing managers’ index data later Tuesday.

On Monday, the gold holdings of SPDR Gold Trust, the world's largest gold-backed ETF, remained steady at 888.63 tonnes. The fund has a market value of $78.33 billion. On the National Stock Exchange, the total value of gold ETF traded was INR 1.76 billion.

"Gold prices are currently facing minor resistance near the INR 78,500 level, with a similar hurdle in the international market at around $2,745-$2,750. This resistance is holding firm, as the upcoming US election adds a layer of caution for investors. Additionally, the Federal Reserve's interest rate cut decision on Nov. 7 is expected to keep gold prices volatile throughout the week," Jateen Trivedi, vice-president and research analyst at LKP Securities, said in an email note.

"Should gold fail to hold above the $2,725 level, it may see further weakness, potentially targeting levels around $2,680 to $2,650. These technical thresholds will be critical for determining the near-term trend in gold prices amidst the heightened market sensitivity to these major events," Trivedi said.

At 1800 IST, the most-active December GOLD contract on the MCX was up 0.1% at INR 78,466 per 10 gm. The most-active December contract on COMEX was 0.1% higher at $2,749.40 per ounce. The highest call open interest for gold was at the INR 78,000-INR 81,000 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.

On the technicals, Reliance Securities said gold price had corrected from the overbought zone, and it is making support weak as it has been consolidating for a long time. The Relative Strength Index is also below 50, showing weakness in the counter. The brokerage firm recommends going short in the evening session.

SILVER prices rose, taking cues from the COMEX, and positive trends in gold and base metals. At 1800 IST, the most-active December contract of silver on the MCX was up 0.2% at INR 94,485 per kg. The same-month contract on the COMEX was 0.4% higher at $32.73 per ounce.

On the options front, the highest call open interest for silver was at the INR 100,000-INR 105,000 strike price, suggesting a bullish view. The highest put open interest was at the INR 90,000 strike for the Nov. 26 silver expiry.

The MCX Bulldex, an index that tracks the real-time performance of gold and silver futures on the MCX, was up 45 points at 19525 points. As of 1755 IST, the December and February gold contracts recorded turnovers of INR 22.62 billion and INR 6.69 billion, respectively, on the MCX. The December and March silver contracts saw turnovers of INR 15.14 billion and INR 2.93 billion, respectively.

The spot gold-silver ratio, also known as the Mint ratio, rose to 84.02, indicating that gold had outperformed silver. The ratio measures the ounces of silver required to buy an ounce of gold. The ratio was 83.54 on Monday.

Outlook for the rest of the session:

--MCX gold seen at INR 78,012–INR 78,874 per 10 gm

--COMEX gold seen at $2,737.60–$2,765.65 an ounce

--MCX silver seen at INR 93,630-INR 95,065 per kg

--COMEX silver seen at $32.33-$33.25 an ounce

End

US$1 = INR 84.11

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

Edited by Vidhi Verma

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2024. All rights reserved.