Informist, Friday, May 19, 2023
By Sandeep Sinha
MUMBAI – Futures contracts of gold today rose slightly on the Multi Commodity Exchange of India and the COMEX as the dollar slipped ahead of the Federal Reserve Chief Jerome Powell’s speech later in the day.
The dollar index, which measures the strength in the greenback against a basket of major currencies, was down 0.3% at 103.18. A weak greenback makes precious commodities priced in the greenback cheaper for holders of other currencies.
The yellow metal prices were aided by short-covering after a sharp fall on Thursday. However, gold is on track to end with the biggest loss since February, having fallen 2.8% for the week on reduced safe-haven appeal after progress made on US debt-ceiling talk.
“Gold is confronted with headwind from several sides at once, in other words. We had envisaged a bout of weakness in the summer months–this is now coming somewhat sooner and turning out to be more pronounced than anticipated,” said Carsten Fritsch, commodity analyst at Commerzbank in a note.
However, we see any further downside potential for the gold price as being limited because the US Fed is likely to have concluded its rate hike cycle, Fritsch said. Gold holdings with SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, remained steady at 936.96 tn. The fund has a market value of $59.04 bln.
The spot gold-silver ratio, also known as the mint ratio, was lower at 83.03, indicating that silver has outperformed gold. 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 by 38 points, or 0.2%, at 16165 at 1825 IST today.
The June and August gold contracts recorded turnovers of 20.88 bln rupees and 7.96 bln rupees, respectively. At 1825 IST, the July and September silver contracts saw turnovers of 20.05 bln rupees and 879.40 mln rupees, respectively.
* At 1825 IST, following were the most active contracts of bullion:
-June gold was up 0.1% at 59,779 rupees per 10 gm on MCX
-June gold was up 0.2% at $1,964.05 an ounce on COMEX
-July silver was up 0.5% at 72,490 rupees per kg on MCX
–July silver was up 0.7% at $23.78 an ounce on COMEX
* Outlook for the rest of the session:
-MCX gold seen at 59,250–60,350 rupees per 10 gm
-COMEX gold seen at $1,945–$1,982 an ounce
-MCX silver seen at 71,500-73,650 rupees per kg
-COMEX silver seen at $23.40-$24.05 an ounce
End
US$1 = 82.66 rupees
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Akul Nishant Akhoury
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