India Bullion: Gold prices up on weaker dollar; US payrolls eyed

Informist, Friday, Jun 2, 2023

By Sandeep Sinha

MUMBAI – Futures contracts of gold rose on the Multi Commodity Exchange of India and COMEX because of a weakness in the dollar ahead of the US non-farm payrolls data, due later today. The sentiment was further boosted by comments from Federal Reserve officials that the central bank may skip a rate hike in the June meeting.

The dollar index, which measures the strength of the greenback against a basket of major currencies, was down 0.1% at 103.48. A weak dollar makes precious metals priced in the greenback cheaper for the holders of other currencies.

The yellow metal is on track to end the week with a gain, having risen 1.4% on MCX and 2.7% on COMEX so far.

“Yellow metal rallied as sentiment improved after dovish comments from Philadelphia Federal Reserve President Patrick Harker that US central bankers should not raise interest rates at their next meeting, even though high inflation is coming down at a ‘disappointingly slow’ pace. Markets now see a 77.2% chance of rates remaining unchanged in the June meeting,” said Saumil Gandhi, senior analyst-commodities at HDFC Securities.

Gold holdings with SPDR Gold Trust, the world’s largest gold-backed exchange traded fund, fell by 1.45 tn to 938.11 tn. The fund has a market value of $59.52 bln.

The price of 10 gm 22 carat gold in the Mumbai bullion market was 60,067 rupees plus 3% goods and services tax, while that of 24 carat 10 gm was 60,308 plus GST. The price of 18 carat gold was quoted at 55,242 plus GST in the retail market.

The spot gold-silver ratio, also known as mint ratio, was lower at 82.89, 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 17 points, or 0.1%, at 16230 points as of 1725 IST.

The August and October gold contracts recorded turnovers of 11.87 bln rupees and 678.42 mln rupees, respectively. At 1725 IST, the July and September silver contracts saw turnovers of 7.10 bln rupees and 602.85 mln rupees, respectively.

On the technical charts, gold has been trading above 5-, 20-, 50-, 100-, and 200-day simple and exponential moving averages on the daily chart. The momentum indicator Relative Strength Index was at 53.94, indicating a positive bias.

* At 1730 IST, following were the most active contracts of bullion:
-August gold was up 0.4% at 60,160 rupees per 10 gm on MCX
-August gold was up 0.1% at $1,996.25 an ounce on COMEX
-July silver was up 0.1% at 72,690 rupees per kg on MCX
-July silver was flat at $23.97 an ounce on COMEX

* Outlook for the rest of the session:
-MCX gold seen at 59,900–60,780 rupees per 10 gm
-COMEX gold seen at $1,960–$2,000 an ounce
-MCX silver seen at 71,800-73,800 rupees per kg
-COMEX silver seen at $23.30-$24.25 an ounce

End

US$1 = 82.30 rupees

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

Edited by Deepshikha Bhardwaj

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Source: Cogencis