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Informist, Tuesday, Dec. 3, 2024

By Sandeep Sinha

MUMBAI – Futures contracts of GOLD rose on the Multi Commodity Exchange of India and on the COMEX because of weakness in the dollar. Investors are awaiting the US Job Openings and Labour Turnover Survey and a speech by Federal Open Market Committee member Adriana Kugler later in the day for further cues.

The rising budget crisis in France and heavy sell-off in government bonds supported safe-haven demand for precious metals.

At 1810 IST, the dollar index, which measures the strength of the greenback against a basket of major currencies, was down 0.1% at 106.33. A weaker greenback makes dollar-denominated precious commodities cheaper for those holding other currencies, thus improving demand.

"Gold is seen range-bound with limited upside unless geopolitical tensions flare up further. Buying on dips is the preferred strategy amid elevated geopolitical risks as the US non-farm payroll report looms," Praveen Singh, associate vice-president, fundamental currencies and commodities, at Mirae Asset Sharekhan said in an email note.

At 1820 IST, the most-active February gold contract on the MCX was up 0.1% at INR 76,750 per 10 grams. The most-active February contract on COMEX was 0.2% higher at $2,663.60 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.

Investors are closely monitoring upcoming US economic data, particularly the non-farm payroll figures, for insights into the Federal Reserve's potential rate decision this month. Swaps markets are pricing in almost a 75% chance that the central bank will cut by a quarter point, Kotak Securities said in a report.

Also, the upside in gold prices was limited due to outflow from gold exchange-traded funds. On Tuesday, gold holdings with the SPDR Gold Trust, the world's largest gold-backed ETF, fell by 2.59 tonnes at 878.96 tonnes. The fund has a market value of $74.38 billion. On the National Stock Exchange, the total value of gold ETFs traded was INR 840 million.

SILVER prices also rose, taking cues from COMEX, and positive trends in gold and industrial metals. At 1825 IST, the most-active March contract of silver on the MCX was up 1% at INR 91,734 per kg. The same-month contract on COMEX was 1.4% higher at $31.29 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 up 29 points at 18800 points. As of 1828 IST, the February and April gold contracts recorded turnovers of INR 19.37 billion and INR 1.05 billion, respectively, on the MCX. The March and May silver contracts saw turnovers of INR 22.59 billion and INR 711.90 million, respectively.

The spot gold-silver ratio, also known as the Mint ratio, fell to 85.62 on Tuesday, indicating that silver had outperformed gold. The ratio measures the ounces of silver required to buy an ounce of gold. The ratio was 86.95 on Friday.

Outlook for the rest of the session:

--MCX gold seen at INR 76,200–INR 77,220 per 10 gm

--COMEX gold seen at $2,638.0–$2,688.0 an ounce

--MCX silver seen at INR 90,250-INR 92,200 per kg

--COMEX silver seen at $30.60-$31.40 an ounce

End

US$1 = INR 84.68

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

Edited by Saji George Titus

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