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Informist, Monday, Oct. 21, 2024

 

--MCX Dec gold contract hits lifetime high of INR 78,240 per 10 gm 

--MCX Dec silver contract hits lifetime high of INR 98,224 per kg 

 

MUMBAI – Futures contracts of gold and silver on the Multi Commodity Exchange of India Ltd. hit a new all-time high Monday following some global central banks cutting key interest rates, analysts said. Analysts, however, see a correction from the current levels and advise not to take fresh positions.

 

On Monday, the most-traded December gold contract hit a fresh lifetime high of INR 78,240 per 10 gm, up 0.6% from Friday's closing price. The same month's silver contract on MCX hit a new all-time high of INR 98,224 per kilogram, up nearly 3% from the previous day's closing price. 

 

The European Central Bank Thursday cut its benchmark interest rate for the third time this year by 25 basis points. The interest rate on deposit facility, main refinancing operations, and marginal lending facility fell to 3.25%, 3.40%, and 3.65%, respectively. The People's Bank of China Monday cut one-year and five-year loan prime rates by 25 basis points to 3.10% and 3.60%, respectively. Lower interest rates make the non-interest-bearing precious metal more attractive to investors.

 

Along with loosening of key interest rates by major central banks, escalating geopolitical tensions in West Asia are supporting gold and silver prices, which boosted the precious metals' safe-haven appeal. Following the death of Hamas leader Yahya Sinwar, there is growing uncertainty over negotiations and conflict in West Asia, given that Sinwar was a vital decision maker, Dow Jones quoted Samer Hasn, senior market analyst at XS.com, as saying in a note. 

 

Meanwhile, Israel struck Beirut's southern suburbs on Sunday and targeted branches of Al-Qard al-Hasan, a financial association associated with Hezbollah and a US-sanctioned bank, according to various media reports. The Gaza health ministry said at least 87 people were killed or missing in Beit Lahia, with more than 40 others wounded and a number of people still trapped under the rubble, the New York Times reported.  

 

Further, a weak dollar index, and continuous flows into exchange-traded funds, also support the surge in gold and silver prices, Ajay Kedia, director, Kedia Advisory said. Kedia suggests avoiding fresh and long positions at these levels as he expects a correction from the current levels as both the precious metals are overpriced at this moment. 

 

Kedia sees gold prices correcting to INR 74,000 per 10 gm level and silver to INR 90,000 per kg level. Manoj Kumar Jain, director, Prithvi Finmart, also sees a correction in gold and silver prices from the current levels to INR 77,400 per 10 gm and INR 94,400 per kg, respectively. Both the analysts see profit-booking at these levels. "The precious metals are overpriced currently". However, Jain and Kedia remain bullish on gold and silver in the long term.  

 

For this week, Kedia sees resistance for the December gold contract at INR 78,930 per 10 gm and support at INR 76,700 per 10 gm. For silver, the analyst sees resistance at INR 99,850 per kg and support at INR 93,400 per kg. According to Jain, resistance for the December gold contract is at INR 79,200 per 10 gm and support is at INR 77,400 per 10 gm. While for silver, Jain sees resistance at INR 100,000 per kg and support at INR 94,400 per kg. 

At 1221 IST, the most-traded December gold contract was at INR 78,180 per 10 gm, 0.6% higher from its previous close and the same month's silver contract was at INR 97,980 per kg, up 2.7% from the previous close.  End

 

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

 

Reported by J. Navya Sruthi

Edited by Vandana Hingorani

 

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