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Informist, Friday, Nov. 29, 2024

By Sandeep Sinha

MUMBAI – Futures contracts of gold on the Multi Commodity Exchange of India and the COMEX rose Tuesday because of a weak dollar, which makes commodities priced in the greenback cheaper for holders of other currencies. The positive movement was also lifted by safe-haven demand for the bullion amid ongoing geopolitical tensions between Russia and Ukraine.

However, the yellow metal is on track to end the week and the month with losses. COMEX gold has fallen 3.2%, or $88.1 an ounce in November, and is down 1.9% or $51 an ounce so far this week. On MCX, gold has lost 2.6%, or INR 2,060 per 10 gm this month and 1.6%, or INR 1,246, this week.

At 1600 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was down 0.2% at 105.97. Trading volumes will likely be lower as the US market is shut for the Thanksgiving holiday, while electronic trading in commodities remains open.

"Gold traded positively, registering a gain of INR 700 to close at INR 77,225 (per 10 grams) in MCX, supported by safe-haven demand amid ongoing geopolitical concerns. On COMEX, gold saw an uptick of $26, trading at $2,665 per ounce as bullish momentum continued. The overall trend remains strong, with key resistance at $2,690 and support at $2,620 in the short term," Jateen Trivedi, vice-president and research analyst at LKP Securities, said in an email note.

At 1601 IST, the most active February gold contract on the MCX was up 0.8% at INR 76,339 per 10 grams. The most active February contract on COMEX was 0.9% higher at $2,687.70 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 74,000-73,000 strike for the Dec. 31 gold contract.

Investors look forward to US November non-farm payrolls data to be published next week for further cues. "If job creation is weak, the Fed would find it easier to cut interest rates again in December. This would benefit the gold price, as a rate cut next month is not fully priced in at the moment," Barbara Lambrecht, commodity analyst at Commerzbank, said in a note to clients.

SILVER prices rose, taking cues from COMEX, and tracking positive trends in gold and industrial metals. At 1606 IST, the most-active March contract of silver on the MCX was up 1.3% at INR 91,331 per kg. The January-month contract on COMEX was 2.1% higher at $30.91 per ounce.

On the options front, the highest call open interest for silver was at the INR 90,000-INR 100,000 strike price. The highest put open interest was at INR 90,000-INR 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 173 points at 18665 points. As of 1820 IST, the December and February gold contracts recorded turnovers of INR 7.68 billion and INR 22.36 billion, respectively, on the MCX. The December and March silver contracts saw turnovers of INR 7.41 billion and INR 19.24 billion, respectively.

The spot gold-silver ratio, also known as the Mint ratio, fell to 86.73 on Friday, indicating that silver had outperformed gold. The ratio measures the ounces of silver required to buy an ounce of gold. The ratio was 88.23 on Wednesday.

Outlook for the rest of the session:

--MCX gold seen at INR 75,915–76,850 per 10 gm

--COMEX gold seen at $2,665.0–$2,705.0 an ounce

--MCX silver seen at INR 89,255-92,100 per kg

--COMEX silver seen at $30.55-$31.20 an ounce

End

US$1 = INR 84.48

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

Edited by Tanima Banerjee

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