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Informist, Wednesday, Oct. 16, 2024

 

--MCX Dec gold contract hits lifetime high of INR 76,750 per 10 gm

 

By Sandeep Sinha

 

MUMBAI – Futures contracts of gold hit an all-time high of INR 76,750 per 10 gm early Wednesday on the Multi Commodity Exchange of India, tracking trends in COMEX because of rising geopolitical tension, fresh inflows in gold exchange funds and rising global debt. 

 

"Gold prices are in a structural bull run and have seen prices cross $2,650 per ounce levels in the international markets and sustaining, despite strength in the dollar index because of geopolitical tensions and the recent report of the International Monetary Fund that suggests that the global public debt could reach 115% of global GDP in the next three years. This is a big trigger for gold prices," Manoj Jain, director at Prithvi Finmart, said.

 

The Bank of America recently revised its gold price forecast and expects prices to test $3,000 per ounce in 2025. "We are expecting gold prices to test $2,800-$2,850 per ounce next year and expect the yellow metal to reach $2,740 per ounce on COMEX and INR 80,000 per 10 gm on MCX by December-end," Jain said.

 

The possibility of an immediate retaliatory attack by Israel on Iran and China launching a military drill encircling Taiwan on Monday is boosting gold’s safe-haven demand. The Times of Israel reported that Israel has decided on the targets it could potentially strike in Iran. 

 

On Tuesday, gold holdings of SPDR Gold Trust, the world's largest gold-backed ETF, rose by 4.02 tonnes to 884.59 tonnes, the highest level since Sept. 12, 2023. The fund has a market value of $75.30 billion. The fund has received 12.65 tonnes of inflow in October so far.

 

However, further upside in bullion metal was limited due to the dollar's strength, which makes commodities priced in the dollar expensive for holders of other currencies. At 1409 IST, the dollar index, which measures the dollar's strength against a basket of six major currencies, was up 0.1% at 103.37.

 

Investors will await key US data on retail sales, industrial production, and jobless claims this week to assess the trajectory of interest rate cuts by the Federal Reserve.

 

At 1407 IST, the December gold contract on the MCX was at INR 76,695 per 10 gm, up 0.4% from Tuesday's close. On COMEX, the most-traded December contract was $2,694 per ounce, up 0.6% from its previous day's close. End

 

US$1 = INR 84.03

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

 

Edited by Saji George Titus

 

 

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