More Stories

Informist, Friday, Nov. 22, 2024

By Sandeep Sinha

MUMBAI – Futures contracts of gold extended gains for the fifth day running on the Multi Commodity Exchange of India and COMEX as an escalation in the Russia-Ukraine war boosted safe-haven demand. Continued inflows in gold exchange-traded funds added to the positive sentiment for the precious metal.

COMEX GOLD is on track to end with the biggest weekly gain in 2024. It has risen 5.3%, or $135.2 per ounce. On MCX, gold has gained 4.8%, or INR 3,561 per 10 gm, so far this week.

"Gold prices added further to weekly gains with international spot gold moving close to $2,700 per ounce and up along with the US dollar, amid rise in safe-haven bets due to rising tensions over escalation in the Russia-Ukraine war," Pranav Mer, vice-president for research, commodity and currency, at BlinkX and JM Financial, said in an email note. "On chart, prices have breached crucial resistance at INR 77,000, and are likely to test INR 77,680-INR 78,000, with support immediate at INR 76,900," Mer said.

On Thursday, gold holdings with the SPDR Gold Trust, the world's largest gold-backed ETF, rose by 2.58 tonnes to 877.97 tonnes. This is the fifth consecutive day that the gold holdings of SPDR Gold Trust have increased. The fund has a market value of $75.22 billion. On the National Stock Exchange, the total value of gold ETFs traded on Friday was INR 1.49 billion, down from INR 1.53 billion on Thursday.

At 1545 IST, the most-active December gold contract on the MCX was up 1.2% at INR 77,600 per 10 gm. The most-active December contract on COMEX was 1.3% higher at $2,709.40 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 1545 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was up 0.6% at 107.72 because of weak economic data from the eurozone. The eurozone flash Composite Purchasing Managers’ Index dropped to a ten-month low of 48.1 in November from 50.0 in October, according to a report published by S&P Global and the Hamburg Commercial Bank.

On the technical front, Reliance Securities said the gold chart had changed structure from a downtrend to an uptrend. Gold prices face major resistance near INR 77,680, where a pull-back can be seen, the brokerage said. The Relative Strength Index was above 50, showing strength in the counter, it said. The brokerage recommends going long in the evening session.

SILVER prices rose, taking cues from the positive trends in gold, but weakness in industrial metals and a firm dollar limited the gains. At 1555 IST, the most-active December contract of silver on the MCX was up 1.1% at INR 90,900 per kg. The same-month contract on COMEX was 1.4% higher at $31.39 per ounce.

On the options front, the highest call open interest for silver was at the INR 90,000-95,000 strike prices. The highest put open interest was at INR 90,000-85,000 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 210 points at 19146 points. As of 1557 IST, the December and February gold contracts recorded turnovers of INR 26.68 billion and INR 17.89 billion, respectively, on the MCX. The December and March silver contracts saw turnovers of INR 19.43 billion and INR 9.62 billion, respectively.

The spot gold-silver ratio, also known as the Mint ratio, rose to 86.42, indicating that silver had underperformed gold. The ratio measures the ounces of silver required to buy an ounce of gold. The ratio was 85.74 on Thursday.

Outlook for the rest of the session:

--MCX gold seen at INR 76,300–77,200 per 10 gm

--COMEX gold seen at $2,660.0–$2,715.0 an ounce

--MCX silver seen at INR 89,250-91,630 per kg

--COMEX silver seen at $30.80-$31.92 an ounce

End

US$1 = INR 84.44

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

Edited by Rajeev Pai

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.