Informist, Wednesday, Feb 23, 2022
By Chinmay Mungse
MUMBAI – Gold futures were in the red today on the Multi Commodity Exchange of India and the COMEX as investors resorted to profit booking after the contracts hit multi-month highs, said analysts.
* On Tuesday, the most-active April contract of GOLD hit a 13-month high of 50,687 rupees per 10 gm on the MCX, while the same month contract on COMEX had hit a nine-month high of $1,918.3 per ounce on Monday. COMEX was shut on Tuesday on the occasion of President's Day.
* The surge in price of the precious metal was because of rising tensions between Russia and Ukraine, which boosted demand for the safe haven asset.
* After Russian President Vladimir Putin recognised two breakaway regions in eastern Ukraine and ordered the deployment of troops there, the US and its European allies announced fresh sanctions against Russia.
* These sanctions include restrictions on trade, investment and financing by US persons to, from and in the Donetsk and Luhansk regions of Ukraine.
* "Stock markets recouped some of their initial losses following the announcement of the sanctions, and bond yields also rose. The gold price dropped back from its high and dipped slightly," said Commerzbank AG.
* Apart from the geopolitical tensions, worries about rising inflation also weighed on gold prices. "Although gold is considered a hedge against inflation, interest rate hikes, especially by the US Federal Reserve, are likely to keep a cap on gold prices," said Mahesh Kumar, head of commodities market at Abans Group.
* SILVER futures were down on MCX tracking losses in contracts on COMEX.
* At 1634 IST, the most-active contracts of bullion were:
--February gold was down 0.6% at 50,031 rupees per 10 gm on MCX
--February gold was down 0.6% at $1,897 an ounce on COMEX
--March silver was down 0.6% at 63,991 rupees per kg on MCX
–-March silver was down 0.9% at $24.10 an ounce on COMEX
* Outlook for the evening session:
--MCX gold seen at 49,950-50,500 rupees
--COMEX gold seen at $1,890-$1,920
--MCX silver seen at 63,700-64,900 rupees
--COMEX silver seen at $23.90-$24.55
End
US$1 = 74.55 rupees
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Ashish Shirke
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