Informist, Monday, May 22, 2023
By Sandeep Sinha
MUMBAI – Futures contracts of gold fell today on the Multi Commodity Exchange of India and the COMEX as traders booked profits after the sharp gains on Friday. The yellow metal struggled for direction as traders cautiously awaited updates from the US debt ceiling negotiations.
Investors remained wary ahead of US President Joe Biden and House Speaker Kevin McCarthy's meeting later today to discuss raising the US debt ceiling and avert a catastrophic default.
However, the downside in the bullion metal was restricted due to fresh inflows in gold exchange-traded funds. Gold holdings with the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose by 5.78 tn to 942.74 tn. The fund has a market value of $59.44 bln.
The upside was also capped as the dollar pared earlier losses and traded in the green. A firm greenback makes dollar-denominated precious metals expensive for holders of other currencies.
The dollar index, which measures the strength of the greenback against a basket of major currencies, was up 0.1% at 103.14.
"On the charts, a key support remains at $1,950 per ounce, but a break below will pull prices to $1,920 per ounce," said Sriram Iyer, senior research analyst at Reliance Securities. "On the upside, key hurdle remains at $1,985 per ounce and a break above will push prices towards $2,015 per ounce level."
Market participants will take cues from Federal Reserve Open Market Committee's May meeting minutes, US core personal consumption expenditure, core durable goods order and preliminary GDP data, all scheduled to be released later in the week.
The spot gold-silver ratio, also known as the mint ratio, was higher at 83.05, indicating that gold has outperformed silver. The ratio measures the ounces of silver required to buy an ounce of gold.
MCX Bulldex, an index tracking the real-time performance of gold and silver futures on the MCX, was down by 53 points, or 0.3%, at 16276 at 1730 IST today.
The June and August gold contracts recorded turnovers of 20.68 bln rupees and 5.59 bln rupees, respectively. At 1730 IST, the July and September silver contracts saw turnovers of 11.48 bln rupees and 676.66 mln rupees, respectively.
* At 1730 IST, following were the most active contracts of bullion:
-June gold was down 0.2% at 60,243 rupees per 10 gm on MCX
-June gold was down 0.4% at $1,974.70 an ounce on COMEX
-July silver was down 0.5% at 72,960 rupees per kg on MCX
–July silver was up 0.7% at $23.90 an ounce on COMEX
* Outlook for the rest of the session:
-MCX gold seen at 59,900–60,800 rupees per 10 gm
-COMEX gold seen at $1,962–$1,993 an ounce
-MCX silver seen at 72,000-74,400 rupees per kg
-COMEX silver seen at $23.37-$24.25 an ounce
End
US$1 = 82.83 rupees
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Tanima Banerjee
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