Informist, Wednesday, Dec 15, 2021

By Chinmay Mungse

MUMBAI – GOLD contracts on the Multi Commodity Exchange of India were higher today as the rupee fell sharply against the dollar. A weaker rupee makes commodities priced in the greenback expensive for Indian investors.

* Gold contracts on the COMEX were in the red today after US producer price index data for November rose 0.8%.

* Producer price index data, which measures the prices businesses receive for their final goods and service, vaulted in November, registering an 11-year-high. The data fuelled expectations for sooner-than-expected interest rate hikes from the US Federal Reserve, said analysts.

* SILVER contracts on the MCX were down tracking losses in the benchmark COMEX contracts.

* "The data showing producer prices at 11-year highs reinforced market expectations of faster stimulus tapering by the Fed," said Sriram Iyer, senior analyst at Reliance Securities.

* The US Fed's two-day policy meeting will conclude after market hours today. Investors expect the Fed to provide a timeline for tapering asset purchases and the subsequent interest rate hike.

* "In view of the very high inflation and tight employment market, Fed Chair Jerome Powell is expected to announce that bond purchases will be brought to an end more quickly than previously planned," said Commerzbank AG.

* Meanwhile, gold holdings with SPDR Gold Trust, the world's largest gold exchange-traded fund, fell 2.03 tn on Tuesday to 980.6 tn, according to data on its website. Silver assets with iShares Silver Trust fell by 46.03 tn to 16,846.02 tn. A fall in holdings is a sign of waning investor interest in bullion.

* At 1900 IST, the most-active contracts of bullion were:
   --February gold was up 0.3% at 48,223 rupees per 10 gm on MCX
   --February gold was down 0.1% at $1,770.8 an ounce on COMEX
   --March silver was up 0.1% at 60,931 rupees per kg on MCX
   –-March silver was down 0.5% at $21.8 an ounce on COMEX

* Outlook for the evening session:
   --MCX gold seen at 47,900-48,150 rupees
   --COMEX gold seen at $1,769-$1,785
   --MCX silver seen at 61,255-62,075 rupees
   --COMEX silver seen at $21.05-$22.18. End

US$1 = 76.23 rupees

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Michael Correya

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