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Informist, Monday, Nov. 25, 2024

By Sandeep Sinha

MUMBAI – Futures contracts of gold fell on the Multi Commodity Exchange of India Monday, tracking a fall on COMEX, because of weak safe-haven demand. Traders trimming their long positions on COMEX for the second successive week and a rebound in the dollar also weighed on sentiment.

"Gold prices fell due to a multitude of factors like no major development on the Russia-Ukraine war front on the weekend, S&P Global US services and composite PMI data topping forecasts, risk-on sentiments, a possibility of Israel reaching a ceasefire with Hezbollah, and Trump appointing Scott Bessent as Treasury Secretary who is vocal about deficit cuts," Praveen Singh, associate vice-president, fundamental currencies and commodities, at Sharekhan by BNP Paribas said in an email note.

Money managers decreased their net long positions in COMEX gold by 7,038 lots to 190,325 as of Tuesday, the lowest in four months, indicating weak sentiment for the yellow metal, according to Commodity Futures Trading Commission data.

At 1745 IST, the dollar index, which measures the strength of the greenback against a basket of major currencies, was up 0.1% at 107.03. A stronger greenback makes dollar-denominated precious commodities more expensive for those holding other currencies, dulling demand.

At 1745 IST, the most-active December gold contract on the MCX was down 1% at INR 76,875 per 10 gm. The most-active December contract on COMEX was 0.9% lower at $2,686.20 per ounce. The highest call open interest for gold was at INR 77,000-78,000 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.

On Friday, gold holdings with the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, remained steady at 877.97 tonnes. The fund has a market value of $76.05 billion. On the National Stock Exchange, the total value of gold ETFs traded Monday was INR 1.46 billion, down from INR 1.49 billion Friday.

SILVER prices fell, taking cues from COMEX and negative trends in gold and industrial metals. At 1747 IST, the most-active December contract of silver on the MCX was down 1.7% at INR 89,226 per kg. The same-month contract on COMEX was 1.7% lower at $30.81 per ounce.

On the options front, the highest call open interest for silver was at the INR 90,000-92,000 strikes. The highest put open interest was at INR 90,000-88,000 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 down 183 points at 18959 points. As of 1750 IST, the December and February gold contracts recorded turnovers of INR 40.01 billion and INR 30.82 billion, respectively, on the MCX. The December and March silver contracts saw turnovers of INR 27.80 billion and INR 2.05 billion, respectively.

The spot gold-silver ratio, also known as the Mint ratio, rose to 87.21, indicating that silver had underperformed gold. The ratio measures the ounces of silver required to buy an ounce of gold. The ratio was 86.66 on Friday.

Outlook for the rest of the session:

--MCX gold seen at INR 76,000–77,300 per 10 gm

--COMEX gold seen at $2,670.0–$2,730.0 an ounce

--MCX silver seen at INR 88,600-90,400 per kg

--COMEX silver seen at $30.70-$31.60 an ounce

End

US$1 = INR 84.28

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

Edited by Rajeev Pai

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