Informist, Wednesday, Jun 15, 2022
By Chinmay Mungse
MUMBAI – GOLD and SILVER contracts on the Multi Commodity Exchange of India and COMEX were trading higher today as the US dollar index and yields on the US treasury bills slipped, boosting the demand for precious metals.
* The dollar index slipped 0.6% to 104.82 against a basket of major currencies, and yields on the benchmark US 10-year Treasury bonds fell to 3.4%, which makes dollar-denominated, non-interest yielding, precious metals cheaper for other currency holders.
* "Investors have covered short positions after a steep fall in bullion prices in the previous two sessions," said Manoj Jain, research head at Prithvi Finmart.
* However, analysts expect the upside in gold prices to be short-lived as the US Federal Reserve is expected to announce an interest rate hike in its June meeting which concludes later today.
* "Gold prices may cap upside on aggressive US Fed stance with expectations of 75 basis point rate hike against the previous census of 50 bps," said Tapan Patel, senior analyst at HDFC Securities.
* Analysts are also expecting the central bank to make comments about the balance sheet trimming today.
* At 1659 IST, the most-active contracts of bullion were:
--June gold was up 1.1% at 50,736 rupees per 10 gm on MCX
--June gold was up 0.9% at $1,830.5 an ounce on COMEX
--July silver was up 2.3% at 60,850 rupees per kg on MCX
–-July silver was up 2.6% at $21.49 an ounce on COMEX
* Outlook for the evening session:
--MCX gold seen at 50,400-50,800 rupees,
--COMEX gold seen at $1,800-$1,840
--MCX silver seen at 60,300-61,200 rupees
--COMEX silver seen at $21.20-$21.60
End
US$1 = 78.06 rupees
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Sushmita Mukherjee
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