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Informist, Monday, Dec. 2, 2024

By Sandeep Sinha

MUMBAI – Futures contracts of gold fell on the Multi Commodity Exchange of India on Monday, tracking a fall on the COMEX because of a rebound in the dollar. Traders taking profit ahead of the US nonfarm payrolls data later in the week also weighed on sentiment.

At 1825 IST, the dollar index, which measures the strength of the greenback against a basket of major currencies, was up 0.2% at 106.28. A stronger greenback makes dollar-denominated precious commodities more expensive for those holding other currencies, dulling demand.

"This correction in the gold rate is largely influenced by the rally in the US Dollar Index, taking prices downwards. Along with this, the chances of the Fed going for another rate cut has dimmed, which has given support to the US Dollar Index, thereby negatively affecting gold prices," Colin Shah, managing director, Kama Jewelry, said in an email note.

At 1825 IST, the most-active February gold contract on the MCX was down 0.5% at INR 76,712 per 10 grams. The most-active February contract on COMEX was 0.6% lower at $2,663.80 per ounce. The highest call open interest for gold was at the INR 77,000-INR 80,000 strike prices, suggesting a bullish view. The highest put open interest was at the INR 74,000-INR 73,000 strikes for the Dec. 31 gold contract.

Market participants will also take cues from the US Institute for Supply Management's manufacturing purchasing managers' index and S&P Global's final manufacturing PMI later in the day.

However, the fall in prices of precious metals was cushioned by a sharp fall in the rupee against the US dollar, which settled at a new lifetime low of 84.70. A weak domestic currency makes commodities priced in dollars such as gold and silver expensive for domestic buyers.

SILVER prices fell taking cues from the COMEX and tracking the weak trend in gold and industrial metals. At 1825 IST, the most-active March contract of silver on the MCX was down 0.7% at INR 90,587 per kg. The same-month contract on COMEX was 0.9% lower at $30.83 per ounce.

On the options front, the highest call open interest for silver was at INR 90,000-INR 100,000 strike prices. The highest put open interest was at INR 90,000-INR 85,000 strikes 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 down 69 points at 18776 points. As of 1820 IST, the February and April gold contracts recorded turnovers of INR 34.60 billion and INR 2.35 billion, respectively, on the MCX. The December and March silver contracts saw turnovers of INR 1.42 billion and INR 22.55 billion, respectively.

The spot gold-silver ratio, also known as the Mint ratio, rose to 86.88 on Monday, indicating that silver had underperformed gold. The ratio measures the ounces of silver required to buy an ounce of gold. The ratio was 86.64 on Friday.

Outlook for the rest of the session:

--MCX gold seen at INR 76,400–INR 77,570 per 10 gm

--COMEX gold seen at $2,648.0–$2,695.0 an ounce

--MCX silver seen at INR 90,150-INR 91,800 per kg

--COMEX silver seen at $30.33-$31.60 an ounce

End

US$1 = INR 84.70

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

Edited by Ashish Shirke

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