Informist, Tuesday, Jun 13, 2023
By Sandeep Sinha
MUMBAI – Futures contracts of gold rose today on the Multi Commodity Exchange of India, tracking firm cues on the COMEX as the dollar and 10-year US Treasury yields fell ahead of the country's consumer price index data, due for a release later today, and Federal Reserve interest decision on Wednesday.
Trading volume was low as investors remained cautious and avoided taking large positions ahead of inflation number. Analysts polled by Dow Jones had estimated the US inflation to rise by 4% on year in May, against 4.9% in April.
The dollar index, which measures the strength of the greenback against a basket of major currencies, was down 0.3% at 103.32. A weaker greenback makes commodities priced in the dollar cheaper for holders of other currencies.
"No matter what decision is taken regarding interest rates, some market participants will be caught wrong-footed and will revise their view, which in turn means the gold price could be in for a volatile session," Thu Lan Nguyen, head of commodity research at Commerzbank said in a research note.
"Given that a rate hike in July is likely to be priced out again in due course by the market, we expect the gold price to slowly but surely regain ground over the next few months," Nguyen said.
Gold holdings with SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell by 0.32 tn to 931.44 tn. The fund has a market value of $58.47 bln.
The price of 22-carat gold in the Mumbai bullion market was 59,616 rupees per 10 gm plus 3% goods and service tax, that of 24-carat gold was 59,856 rupees per 10 gm plus GST, and price of 18-carat gold was 54,828 rupees per 10 gm plus GST.
The spot gold-silver ratio, also known as the mint ratio, was higher at 81.19, indicating that gold had 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 up 24 points, or 0.2%, at 16175 as of 1735 IST.
The June and August gold contracts recorded turnovers of 9.68 bln rupees and 750.64 bln rupees, respectively. At 1735 IST, the July and September silver contracts saw turnovers of 8.47 bln rupees and 431.36 mln rupees, respectively.
On the technical charts, MCX August gold contract was trading higher than the 5-, 100-and 200-day simple moving averages, but lower than the 20- and 50-day simple moving averages on the daily chart. The momentum oscillator Relative Strength Index is at 47.24, indicating a mildly bearish stance in the price.
* At 1740 IST, following were the most active contracts of bullion:
-August gold was up 0.1% at 59,715 rupees per 10 gm on MCX
-August gold was up 0.3% at $1,976.25 an ounce on COMEX
-July silver was up 0.5% at 73,364 rupees per kg on MCX
–July silver was up 0.8% at $24.26 an ounce on COMEX
* Outlook for the rest of the session:
-MCX gold seen at 59,200–60,200 rupees per 10 gm
-COMEX gold seen at $1,954–$1,985 an ounce
-MCX silver seen at 72,000-74,500 rupees per kg
-COMEX silver seen at $24.05-$24.60 an ounce
End
US$1 = 82.37 rupees
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Manisha Baxla
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