Informist, Monday, Jun 5, 2023
By Sandeep Sinha
MUMBAI – Futures contracts of gold fell on the Multi Commodity Exchange of India and COMEX because of strength in the dollar and weak safe-haven demand for the precious metal.
The dollar index, which measures the strength of the greenback against a basket of major currencies, was up 0.2% at 104.29 on robust US jobs data. A firm dollar makes precious metals priced in the greenback expensive for the holders of other currencies.
The physical gold demand remained weak in top consumers China and India, which also weighed on the prices.
India’s gold imports in April fell to 16.7 tn from 61.7 tn a month ago, according to data from the Directorate General of Commercial Intelligence and Statistics.
“Gold continues to trade lower on the back of positive economic data points, higher US dollar and yields, offsetting support from the prospects that the Federal Reserve would pause its rate hikes this month,” Manav Modi, analyst at Motilal Oswal Financial Services said.
The US jobs market remains tight as the JOLTS, ADP private payroll and the nonfarm, all were reported better than expectations. US nonfarm payrolls rose by 339,000 jobs last month, higher than an expected increase of 190,000, Manav said.
Gold holdings with SPDR Gold Trust, the world’s largest gold-backed exchange traded fund, remained steady at 938.11 tn. The fund has a market value of $59.19 bln.
The price of 10 gm 22 carat gold in the Mumbai bullion market was 59,362 rupees plus 3% goods and services tax, while that of 24 carat 10 gm was 59,601 plus GST. The price of 18 carat gold was quoted at 54,595 plus GST in the retail market.
The spot gold-silver ratio, also known as mint ratio, was higher at 82.80, 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 51 points, or 0.3%, at 16036 points, at 1755 IST.
The August and October gold contracts recorded turnovers of 16.44 bln rupees and 298.86 mln rupees, respectively. At 1755 IST, the July and September silver contracts saw turnovers of 9.36 bln rupees and 572.72 mln rupees, respectively.
On the technical charts, gold has been trading below 5-, 20-, 50-day simple and exponential moving averages, but higher than 100-, and 200-day simple and exponential moving averages on the daily chart. Momentum indicator Relative Strength Index was at 42.49, indicating further weakness in the price.
* At 1800 IST, following were the most active contracts of bullion:
-August gold was down 0.6% at 59,419 rupees per 10 gm on MCX
-August gold was down 0.7% at $1,955.65 an ounce on COMEX
-July silver was down 0.7% at 71,569 rupees per kg on MCX
-July silver was down 1.1% at $23.46 an ounce on COMEX
* Outlook for the rest of the session:
-MCX gold seen at 59,050–59,950 rupees per 10 gm
-COMEX gold seen at $1,950–$1,970 an ounce
-MCX silver seen at 71,000-72,450 rupees per kg
-COMEX silver seen at $23.16-$23.82 an ounce
End
US$1 = 82.67 rupees
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Aditya Sakorkar
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