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Informist, Wednesday, Dec. 4, 2024

By Sandeep Sinha

MUMBAI – Futures contracts of gold were flat on the Multi Commodity Exchange of India and the COMEX as traders await fresh triggers. The yellow metal traded in a narrow range as traders were cautious of making aggressive bets ahead of the US Federal Reserve Chairman Jerome Powell's speech later Wednesday.

The rebound in the dollar and outflow from gold exchange-traded funds were offset by geopolitical tensions in West Asia and political uncertainties in South Korea and France, supported safe-haven buying.

At 1745 IST, the dollar index, which measures the strength of the greenback against a basket of major currencies, was up 0.2% at 106.50. A firm greenback makes dollar-denominated precious commodities expensive for holders of other currencies.

On Tuesday, gold holdings with the SPDR Gold Trust, the world's largest gold-backed ETF, fell by 2.3 tonnes at 873.66 tonnes. The fund has a market value of $74.14 billion. On the National Stock Exchange, the total value of gold ETFs traded was INR 812.2 million, down from INR 840 million on Tuesday.

"Gold prices traded steady to positive, supported by safe-haven demand amid a rise in the geo-political risk premium and some chart-based buying after key resistance was breached," said Pranav Mer, vice-president-research, commodity and currency, at JM Financial, in an email note.  However, gains look capped by a stronger greenback and some caution was seen ahead of the Fed chairman's speech and key economic data from the services purchasing managers' index to US non-farm payrolls data later in the week, Mer said.

At 1755 IST, the most-active February gold contract on the MCX was steady at INR 76,870 per 10 grams. The most-active February contract on COMEX was flat at $2,643.30 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.

SILVER prices fell, taking cues from COMEX, and a weak trend in industrial metals. At 1800 IST, the most-active March contract of silver on the MCX was down 0.4% at INR 91,812 per kg. The same-month contract on COMEX was 0.6% lower at $31.31 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 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 marginally down 3 points at 18834 points. As of 1806 IST, the February and April gold contracts recorded turnovers of INR 21.52 billion and INR 728.5 million, respectively, on the MCX. The March and May silver contracts saw turnovers of INR 13.62 billion and INR 357.37 million, respectively.

The spot gold-silver ratio, also known as the Mint ratio, rose to 86.03 on Wednesday, indicating that silver had underperformed gold. The ratio measures the ounces of silver required to buy an ounce of gold. The ratio was 85.68 on Tuesday.

Outlook for the rest of the session:

--MCX gold seen at INR 76,318–INR 77,280 per 10 gm

--COMEX gold seen at $2,633.80–$2,688.80 an ounce

--MCX silver seen at INR 90,950-INR 92,470 per kg

--COMEX silver seen at $31.10-$31.60 an ounce

End

US$1 = INR 84.74

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

Edited by Akul Nishant Akhoury

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