Informist, Tuesday, Aug 30, 2022
By Chinmay Mungse
MUMBAI – GOLD and SILVER contracts on the Multi Commodity Exchange of India and COMEX were in the red today as investors remained cautious about aggressive interest rate hikes by major global central banks.
* Following the hawkish remarks by the US Fed Chair Jerome Powell, investors and market participants are wary of placing bullish bets on the yellow metal contracts, fearing an aggressive rate hike by the central bank.
* According to the CME FedWatch tool, about 70% of the market participants are expecting the US Fed to raise interest rates by 75 basis points in its upcoming policy meet.
* "The bets (of a 75 bps rate hike) were reaffirmed by Powell's hawkish remarks on Friday, signalling that interest rates would be kept higher for longer to bring down inflation. This, along with the risk-on impulse, seem to cap gains for gold," said fxstreet.com in a report.
* The European Central Bank is also expected to raise its interest rates by 50 or 75 bps in its monetary policy meet on Sep 8.
* The ECB members present at the Jackson Hole Symposium said that the central bank is prepared to at least repeat the half-point increase in interest rates it delivered last month, with an even bigger move not to be excluded as inflation nears yet another record.
* "The persistent rate hike worries and the aggressive monetary policy tightening by major global central banks has pressured bullion prices," said Ajay Kedia, research head at Kedia Comtrade.
* At 1658 IST, the most active contracts of bullion were:
--October gold was down 0.7% at 50,900 rupees per 10 gm on MCX
--December gold was down 0.2% at $1,745.9 an ounce on COMEX
--September silver was down 0.7% at 53,950 rupees per kg on MCX
–-September silver was down 0.3% at $18.54 an ounce on COMEX
* Outlook for the evening session:
--MCX gold seen at 50,750-51,020 rupees
--COMEX gold seen at $1,718-$1,758
--MCX silver seen at 54,450-55,650 rupees
--COMEX silver seen at $18.35-$19.00.
End
US$1 = 79.45 rupees
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Maheswaran Parameswaran
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