India Bullion
Gold prices up on short-covering; US CPI data eyed
This story was originally published at 17:06 IST on 13 November 2024
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By Sandeep Sinha
MUMBAI – Futures contracts of gold rose on the Multi Commodity Exchange of India Wednesday, tracking gains on COMEX because of short-covering after three days of fall. The yellow metal traded in a narrow range as investors remain wary ahead of the US CPI data later in the day.
"Gold prices are trading a tad higher but close to a two-month low, weighed by a stronger US dollar and higher Treasury yields ahead of the US CPI data later in the day along with remarks from Fed Chair (Jerome) Powell and other central bank officials," Pranav Mer, vice-president-research, commodity and currency, at BlinkX and JM Financial said in an email note.
At 1545 IST, the most-active December GOLD contract on the MCX was up 0.2% at INR 75,067 per 10 gram. The most-active December contract on COMEX was 0.3% higher at $2,614.10 per ounce. The highest call open interest for gold was at the INR 77,000-78,000 strike price, suggesting a bullish view. The highest put open interest was at the INR 75,000-74,000 strike for the Nov. 26 gold contract.
However, the upside in the bullion metal was limited by outflows in gold exchange-traded funds. On Tuesday, gold holdings with the SPDR Gold Trust, the world's largest gold-backed ETF, fell for the seventh straight day by 1.44 tonnes to 870.53 tonnes. The fund has a market value of $72.99 billion. On the National Stock Exchange, the total value of gold ETFs traded was INR 1.97 billion, down from INR 2.2 billion on Tuesday.
"In the near term, gold is likely to weaken further on the stronger US dollar, growth optimism, and investors favouring cryptos. A decline to $2,500 is possible. The US Dollar Index eyes 107.50 level in the near term," said Praveen Singh, associate vice-president, fundamental currencies and commodities, at Sharekhan by BNP Paribas.
Investors will also take cues from speeches by US Federal Open Market Committee members John Williams and Neel Kashkari later Wednesday.
SILVER prices rose, taking cues from COMEX and positive trends in gold. At 1545 IST, the most-active December contract of silver on the MCX was up 0.8% at INR 90,031 per kg. The same-month contract on COMEX was 0.9% higher at $31.02 per ounce.
On the options front, the highest call open interest for silver was at the INR 95,000-100,000 strike price. The highest put open interest was at INR 90,000-85,000 strike for the Nov. 26 silver expiry.
On the technical front, Reliance Securities said the price had given a change in structure from a downtrend to an uptrend. If silver prices form a bullish candlestick pattern at a support level of INR 89,600, then a buying opportunity may present itself, the brokerage said. It recommended going long in the evening session.
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 18667 points. As of 1540 IST, the December and February gold contracts recorded turnovers of INR 14.81 billion and INR 3.14 billion, respectively, on the MCX. The December and March silver contracts saw turnovers of INR 12.06 billion and INR 2.87 billion, respectively.
The spot gold-silver ratio, also known as the Mint ratio, fell to 84.37, indicating that silver had outperformed gold. The ratio measures the ounces of silver required to buy an ounce of gold. The ratio was 85.67 on Tuesday.
Outlook for the rest of the session:
--MCX gold seen at INR 74,500–75,450 per 10 gm
--COMEX gold seen at $2,589.0–$2,626.80 an ounce
--MCX silver seen at INR 88,500-91,270 per kg
--COMEX silver seen at $30.43-$31.33 an ounce
End
US$1 = INR 84.38
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Rajeev Pai
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