Informist, Thursday, May 25, 2023
By Sandeep Sinha
MUMBAI – Futures contracts of gold were a tad down today on the Multi Commodity Exchange of India and COMEX due to a rise in the dollar index ahead of release of preliminary US GDP data for Jan-Mar.
The dollar index, which measures the strength in the greenback against a basket of major currencies, was up 0.2% at 104.07 today, the highest in two months. A firm greenback makes precious commodities priced in the greenback expensive for holders of other currencies.
Investors will take cues from the release of second reading of the US Jan-Mar GDP and initial jobless claims data later today.
However, the downside in prices of the yellow metal was limited because of safe-haven demand after Fitch Ratings on Wednesday placed US’ ‘AAA’ long-term foreign-currency issuer default rating on negative watch due to uncertainties over debt-ceiling talks.
“Safe-haven demand due to the US debt-ceiling crisis was offset by gains in Treasury yields that typically weigh on yellow metals,” said Saumil Gandhi, senior analyst, commodities, at HDFC Securities. “We expect bearish momentum will continue in gold prices and COMEX gold has support at $1,950 per ounce. If the price breaks this support, then the fall will extend to $1,935-$1,923 per ounce levels,” Gandhi said.
Gold holdings with the SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, remained steady at 941.29 tn. The fund has a market value of $59.59 bln.
The spot gold-silver ratio, also known as the mint ratio, was higher at 85.31, 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 down 18 points, or 0.1%, at 16076 points as of 1645 IST.
The June and August gold contracts recorded turnovers of 18.12 bln rupees and 7.16 bln rupees, respectively. At 1645 IST, the July and September silver contracts saw turnovers of 10.55 bln rupees and 425.42 mln rupees, respectively.
* At 1645 IST, following were the most active contracts of bullion:
-June gold was down 0.1% at 59,820 rupees per 10 gm on MCX
-June gold was down 0.1% at $1,962.0 an ounce on COMEX
-July silver was down 0.5% at 70,724 rupees per kg on MCX
–July silver was down 0.6% at $23.10 an ounce on COMEX
* Outlook for the rest of the session:
-MCX gold seen at 59,500–60,350 rupees per 10 gm
-COMEX gold seen at $1,940–$1,983 an ounce
-MCX silver seen at 70,000-72,300 rupees per kg
-COMEX silver seen at $22.75-$23.55 an ounce
End
US$1 = 82.74 rupees
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Tanima Banerjee
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