Informist, Thursday, May 4, 2023
By Sandeep Sinha
MUMBAI – Gold contracts on the Multi Commodity Exchange of India and COMEX hit lifetime highs today because of high safe-haven demand amid risks of a recession in Western countries and fear of contagion of the crisis in the US regional banking sector.
A continued impasse between Republican party lawmakers and the Biden administration over the US debt ceiling also contributed to the positive cues.
However, the precious metal pared some gains as the dollar index recovered from the day’s lows, and due to profit booking.
“The rally in the prices of precious metals is largely due to the developments in the US-Fed meeting, the debt ceiling, and concerns around slowing economic growth affecting the dollar and ultimately, the gold/silver prices,” said Colin Shah, founder and managing director of Kama Jewelry.
“The hiking of rates by the US Fed has put pressure on the dollar, and indications of pausing and a likely mild recession in the later part of 2023 have provided support to gold prices,” Shah said.
“Going ahead, gold still looks lucrative in terms of ROI from a safety perspective where the inflation still remains high globally and interest cycle which is yet to ease, will also provide the push needed for gold to run and give 10-15% return in coming FY24,” said Jateen Trivedi, vice-president research analyst at LKP Securities. “The prices can easily touch 66,000-68,000 rupees per 10 gm on base case performance before we reach the FY24 end next year.”
The spot gold-silver ratio was up at 79.82, indicating that gold outperformed silver. The ratio measures the number of silver ounces required to buy an ounce of gold.
Gold holdings with SPDR Gold Trust, the world’s largest gold-backed exchange traded fund, remained steady at 928.30 tn. The fund has a market value of $60.09 bln.
MCX Bulldex, an index tracking the real-time performance of gold and silver futures on the MCX, was up 115 points, or 0.7%, at 16721 as of 1755 IST.
As of 1755 IST, the June and August gold contracts recorded turnovers of 23.25 bln rupees and 4.19 bln rupees, respectively. At the same time, the July and September silver contracts saw a turnover of 19.21 bln rupees and 584.76 mln rupees, respectively.
* At 1755 IST, the most active contracts of bullion were:
–June gold was up 0.6% at 61,319 rupees per 10 gm on MCX
–June gold was up 0.5% at $2,047.40 an ounce on COMEX
–July silver was up 1.2% at 76,336 rupees per kg on MCX
–-July silver was up 0.8% at $25.88 an ounce on COMEX
* Outlook for the rest of the session:
–MCX gold seen at 60,850–61,750 rupees per 10 gm
–COMEX gold seen at $2,035–$2,065 an ounce
–MCX silver seen at 74,700-77,200 rupees per kg
–COMEX silver seen at $25.28-$26.00 an ounce
End
US$1 = 81.80 rupees
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Avishek Dutta
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