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Informist, Thursday, Nov. 28, 2024

By Sandeep Sinha

MUMBAI – Futures contracts of gold rose on the Multi Commodity Exchange of India Thursday, tracking gains on COMEX, due to a safe-haven appeal after Russia launched an attack on Ukrainian energy infrastructure. However, the upside in yellow metal remained limited because of outflow in gold exchange-traded funds and a firm dollar, which makes commodities priced in the greenback expensive for holders of other currencies.

At 1820 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was up 0.2% at 106.23. Trading volumes are likely to be lower as the US market is shut for the Thanksgiving Holiday.

On Wednesday, gold holdings with the SPDR Gold Trust, the world's largest gold-backed ETF, fell by 860 kg to 878.55 tonnes. The fund has a market value of $74.57 billion. On the National Stock Exchange, the total value of gold ETFs traded was INR 842.9 million, down from 1.48 billion on Wednesday.

At 1820 IST, the most active December gold contract on the MCX was up 0.1% at INR 75,869 per 10 grams. The most active December contract on COMEX was 0.2% higher at $2,645.30 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 Dec. 31 gold contract.

"Gold prices exhibited significant volatility, starting on a weaker note but quickly finding support amid renewed geopolitical tensions between Russia and Ukraine, which continue to bolster safe-haven buying. Immediate support is at $2,625 per ounce, while resistance lies at $2,655–2,665", Jateen Trivedi, vice-president and research analyst at LKP Securities, said in an email note. A decisive fall below $2,620 could drive prices toward $2,580, while a breakout above $2,665 could trigger a sharp rally toward $2,690, Trivedi said.

SILVER prices were flat as the positive trend in gold was offset by weakness in industrial metals. At 1820 IST, the most active December contract of silver on the MCX was flat at INR 87,657 per kg. The same-month contract on COMEX was steady at $30.12 per ounce.

On the options front, the highest call open interest for silver was at the INR 90,000-100,000 strike price. The highest put open interest was at INR 90,000-85,000 strike for the Feb. 24 silver expiry.

The MCX Bulldex, an index that tracks the real-time performance of gold and silver futures on the MCX, was up 14 points at 18700 points. As of 1820 IST, the December and February gold contracts recorded turnovers of INR 11.94 billion and INR 19.69 billion, respectively, on the MCX. The December and March silver contracts saw turnovers of INR 18.83 billion and INR 22.93 billion, respectively.

The spot gold-silver ratio, also known as the Mint ratio, rose to 87.94, indicating that silver had underperformed gold. The ratio measures the ounces of silver required to buy an ounce of gold. The ratio was 87.18 on Wednesday.

Outlook for the rest of the session:

--MCX gold seen at INR 75,320–76,300 per 10 gm

--COMEX gold seen at $2,630.0–$2,680.0 an ounce

--MCX silver seen at INR 86,772-88,450 per kg

--COMEX silver seen at $29.85-$30.80 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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