Informist, Monday, Feb 26, 2024
By Sandeep Sinha
MUMBAI – Futures contracts of GOLD fell on the Multi Commodity Exchange of India and the COMEX today because of weak safe-haven demand, following hawkish comment from officials. The sentiment in yellow metal was also weighed down by a fall in US weekly jobless claims by 12,000 for the week ended Feb 17.
Federal Reserve Governor Christopher Waller on Friday said, "The data that we have received since my last speech has reinforced my view that we need to verify that the progress on inflation we saw in the last half of 2023 will continue and this means there is no rush to begin cutting interest rates to normalise monetary policy." The expectations of higher interest rates reduces appeal of non-yielding assets such as gold.
For the week, US personal consumption expenditure price index, second estimate of US Oct-Dec GDP, ISM manufacturing purchasing managers' index and a slew of Fed official's speeches will be in spotlight. "PCE price index is expected to see an uptick in January, which might be a headwind for gold prices," Ravindra Rao, head of commodity research at Kotak Securities said.
However, the downside remained limited in bullion because of a weaker dollar, which makes commodities priced in the greenback cheaper for holders of other currencies. The dollar index, which measures the strength of the greenback against a basket of six major currencies, was down 0.2% at 103.79.
On Friday, gold holdings with the SPDR Gold Trust, the world's largest gold-backed ETF, remained steady at 827.81 tn. The fund has a market value of $53.95 bln.
The spot gold-silver ratio, also known as the Mint Ratio, was higher at 90.17 to 1, which indicates that gold has outperformed silver. The ratio measures the ounces of silver required to buy an ounce of gold.
SILVER prices fell, taking weak cues from COMEX and a downtick in gold. The white metal prices are also trading below the key averages and the Relative Strength Index is at 39.54 signalling further downside in the price.
MCX Bulldex, an index tracking the real-time performance of gold and silver futures on the MCX, was down 61 points at 15954 points.
At 1825 IST, the April and June gold contracts recorded turnovers of 10.07 bln rupees and 1.65 bln rupees, respectively. At the same time, the March and May silver contracts saw turnovers of 13.92 bln rupees and 11.32 bln rupees, respectively.
* At 1825 IST, the following were the most active contracts of bullion:
--April gold was down 0.1 at 62,268 rupees per 10 gm on MCX
--April gold was down 0.3 at $2,043.10 an ounce on COMEX
--March silver was down 1.2 at 69,624 rupees per kg on MCX
–-March silver was down 1.7% at $22.80 an ounce on COMEX
* Outlook for the rest of the session:
--MCX gold seen at 61,950–62,720 rupees per 10 gm
--COMEX gold seen at $2,022–$2,068 an ounce
--MCX silver seen at 69,000-70,750 rupees per kg
--COMEX silver seen at $22.55-$23.10 an ounce
End
US$1 = 82.89 rupees
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Manisha Baxla
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