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Informist, Tuesday, Nov. 26, 2024

By Ashutosh Pati

MUMBAI – Futures contracts of gold rose on the Multi Commodity Exchange of India and COMEX Tuesday on safe-have demand as US President-elect Donald Trump vowed to impose tariffs on imports from China, Mexico, and Canada from his first day in office. Trump plans to levy an additional 10% tariff on Chinese goods and 25% tariffs on all imports from Mexico and Canada.

The sentiment was also lifted by a weaker dollar, which saw a correction after rising nearly 1% to 107.504 earlier in the day, following Trump's pledge on trade tariffs. At 1847 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was down 0.1% at 106.68. A weaker dollar makes commodities priced in the greenback cheaper for buyers holding other currencies.

According to the CME Fedwatch tool, the odds of the US Federal Reserve cutting interest rates by 25 basis points at its upcoming meeting in December rose to 59.6% from 52.3% on Monday. The probability of no rate cut was at 40.4%. Lower interest rates reduce the opportunity cost of holding the non-yielding precious metal.

At 1848 IST, the most-active December GOLD contract on the MCX was up 0.5% at INR 75,655 per 10 gram. The most-active December contract on COMEX was up 0.8% at $2,638.3 per ounce.

Taking cues from positive gold prices, the most-active December contract of SILVER on the MCX also rose 1.2% to INR 88,750 per kg. The same-month contract on COMEX was up 1.4% at $30.65 per ounce. 

For further cues, investors await the minutes of the US Federal Open Market Committee's November meeting and the conference board consumer confidence data due later in the day. They will also watch out for the US Personal Consumption Expenditures Price Index due Wednesday.

Outlook for the rest of the session:

--MCX gold seen at INR 74,088–76,882 per 10 gm

--COMEX gold seen at $2,618.0–$2,650.0 an oz

--MCX silver seen at INR 85,767-90,529 per kg

--COMEX silver seen at $30.20-$30.90 an oz

End

US$1 = INR 84.32

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

Edited by Rajeev Pai

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