Informist, Wednesday, May 24, 2023
By Sandeep Sinha
MUMBAI – Futures contracts of gold rose moderately on the Multi Commodity Exchange of India today on a cue from COMEX on safe-haven demand ahead of the release of the minutes of the Federal Open Market Committee meeting later today.
The possibility of US debt default after House Speaker Kevin McCarthy expressed his doubt about reaching a deal led to a sell-off in riskier assets and supported the yellow metal.
“Gold prices recovered from yesterday’s (Tuesday) low as the threat of a US default supported safe-haven demand,” said Saumil Gandhi, senior analyst, commodities, at HDFC Securities. “However, it has been trading in a tight range as investors wait for more clarity on the debt-ceiling standoff and the Federal Reserve’s rate path.”
“Gold is still stuck in a broad range of $1,950-$2,000, which reflects volatility in the metal,” said Praveen Singh, associate vice-president, fundamental currencies and commodities, at Sharekhan by BNP Paribas.
However, the upside in the yellow metal was restricted by firmness in the dollar and outflow in gold exchange-traded funds. The dollar index, which measures the strength of the greenback against a basket of six major currencies, was up 0.2% at 103.64.
Gold holdings with the SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell by 2.6 tn to 941.29 tn. The fund has a market value of $59.57 bln.
The spot gold-silver ratio, also known as the mint ratio, was higher at 83.82, indicating that gold has 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 26 points, or 0.2%, at 16259 points at 1725 IST today.
The June and August gold contracts recorded turnovers of 18.69 bln rupees and 5.32 bln rupees, respectively. At 1725 IST, the July and September silver contracts saw turnovers of 10.50 bln rupees and 491.99 mln rupees, respectively.
* At 1725 IST, following were the most active contracts of bullion:
-June gold was up 0.2% at 60,310 rupees per 10 gm on MCX
-June gold was up 0.4% at $1,983.45 an ounce on COMEX
-July silver was down 0.3% at 71,950 rupees per kg on MCX
–July silver was down 0.1% at $23.59 an ounce on COMEX
* Outlook for the rest of the session:
-MCX gold seen at 59,750–60,850 rupees per 10 gm
-COMEX gold seen at $1,968–$1,992 an ounce
-MCX silver seen at 71,100-72,450 rupees per kg
-COMEX silver seen at $22.85-$24.0 an ounce
End
US$1 = 82.66 rupees
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Rajeev Pai
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