Informist, Wednesday, Mar 9, 2022
By Chinmay Mungse
MUMBAI – Gold futures on the Multi Commodity Exchange of India and COMEX were in the red today because investors booked profits after the contracts touched their highest levels ever on Tuesday.
* The ongoing war between Ukraine and Russia pushed the most-active April GOLD contract on the MCX and COMEX to all-time highs of 55,558 rupees per 10 gm and $2,078 per ounce, respectively.
* "Gold prices are currently under profit-taking. Investors have also shifted focus to the upcoming US Federal meeting, which has weighed on gold prices," said Veeresh Hiremath, director at Finlit Consulting.
* Investors expect the US Fed to announce a rate hike in the meeting, which is scheduled between Monday and Tuesday. Fed Chairman Powell had earlier indicated a 25-basis-point hike in rates to cool down the rising inflation in the country.
* "Apart from profit-taking, the market is also reacting to the statement by Ukrainian President Volodymyr Zelensky, that he is not thinking about the membership of NATO (The North Atlantic Treaty Organization) and is ready to talk with Russia on two disputed states," said Manoj Jain, research head at Prithvi Finmart.
* A sharp jump in US Treasury yields also put pressure on the precious metal in the international market.
* However, analysts believe that concerns over higher inflation due to rising crude oil prices will keep the demand for gold elevated.
* "Many market participants appear to fear that ban on Russian oil imposed by US and UK will push energy prices even higher, which will fuel inflation on the one hand and weigh on the economy on the other," said Commerzbank AG.
* In the domestic market, a stronger rupee against the US dollar also weighed on gold prices. A stronger rupee makes dollar-denominated commodities cheaper for Indian investors.
* At 1624 IST, the most-active contracts of bullion were:
--April gold was down 1.3% at 53,508 rupees per 10 gm on MCX
--April gold was down 1.2% at $2,018.1 an ounce on COMEX
--May SILVER was down 0.1% at 71,269 rupees per kg on MCX
–-May silver was down 1.3% at $26.54 an ounce on COMEX
* Outlook for the evening session:
--MCX gold seen at 53,700-54,250 rupees
--COMEX gold seen at $2,020-$2,050
--MCX silver seen at 69,800-73,025 rupees
--COMEX silver seen at $25.80-$27.74
End
US$1 = 76.56 rupees
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Namrata Rao
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