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Informist, Thursday, Nov. 21, 2024

By Sandeep Sinha

MUMBAI – Futures contracts of gold extended gains for the fourth straight day on the Multi Commodity Exchange of India and the COMEX as investors sought the gold’s haven appeal amid escalating tensions in the Russia-Ukraine war. Inflows in gold exchange-traded funds added to the positive sentiment for the precious metal.

"Heightened geopolitical tensions continue to support gold prices. Ukraine using British and American missiles for attacks inside Russia and Russia lowering its nuclear doctrine are stoking concerns that the geopolitical situation could deteriorate quickly. Russia, as it has warned earlier, may use tactical nuclear weapons to deter Western powers," Praveen Singh, associate vice-president, fundamental currencies and commodities, at Sharekhan by BNP Paribas said in an email note.

On Wednesday, gold holdings with SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose by 3.16 tonnes to 875.39 tonnes. This is the fourth consecutive day that the gold holdings of SPDR Gold Trust have increased. The fund has a market value of $74.30 billion. On the National Stock Exchange, the total value of gold ETFs traded on Thursday was INR 1.53 billion, up from INR 1.20 billion on Tuesday.

At 1555 IST, the most-active December gold contract on the MCX was up 0.7% at INR 76,580 per 10 gm. The most-active December contract on COMEX was 0.7% higher at $2,670.20 per ounce. The highest call open interest for gold was at INR 77,000-80,000 strike prices, suggesting a bullish view. The highest put open interest was at INR 75,000-74,000 strikes for the Nov. 26 gold contract.

The upside in the bullion metal was partially restricted by a firm dollar, which makes commodities priced in the greenback expensive for holders of other currencies. At 1555 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was up 0.1% at 106.73 ahead of the US weekly jobless claims later in the day. Analysts polled by Dow Jones estimated the jobless claims to come in at 220,000, up by 3,000 from last week.

SILVER prices rose, taking cues from the positive trends in gold, but weakness in industrial metals limited the gains. At 1555 IST, the most-active December contract of silver on the MCX was up 0.2% at INR 90,269 per kg. The same-month contract on COMEX was 0.3% higher at $31.09 per ounce.

On the options front, the highest call open interest for silver was at the INR 90,000-INR 100,000 strike prices. The highest put open interest was at INR 90,000-INR 85,000 strikes 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 118 points at 18955 points. As of 1559 IST, the December and February gold contracts recorded turnovers of INR 27.82 billion and INR 11.17 billion, respectively, on the MCX. The December and March silver contracts saw turnovers of INR 14.46 billion and INR 4.61 billion, respectively.

The spot gold-silver ratio, also known as the Mint ratio, rose to 85.98, indicating that silver had underperformed gold. The ratio measures the ounces of silver required to buy an ounce of gold. The ratio was 84.97 on Wednesday.

Outlook for the rest of the session:

--MCX gold seen at INR 75,120–INR 77,100 per 10 gm

--COMEX gold seen at $2,631.0–$2,685.0 an ounce

--MCX silver seen at INR 89,350-91,440 per kg

--COMEX silver seen at $30.73-$31.29 an ounce

End

US$1 = INR 84.49

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

Edited by Saji George Titus

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