India Bullion: Gold prices tad up on Fed rate pause hope, ETF inflow

Informist, Tuesday, Jun 6, 2023

By Sandeep Sinha

MUMBAI – Futures contracts of gold rose slightly today on the Multi Commodity Exchange of India and the COMEX, on expectation of a pause in the US Federal Reserve’s rate hikes and on fresh inflows in exchange-traded funds.

However, the upside in the yellow metal was restricted by a firm dollar. The dollar index, which measures the strength of the greenback against a basket of major currencies, was up 0.3% at 104.33. A firm greenback makes commodities priced in the greenback expensive for holders of other currencies.

Gold holdings with SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose by 1.45 tn to 939.56 tn. The fund has a market value of $59.17 bln.

“Gold prices were steady after rising 0.70% in the previous session as weak US service-sector data indicated a less upbeat assessment of the US economy and renewed safe-haven demand,” said Saumil Gandhi, senior analyst, commodities, HDFC Securities.

The ISM Services Purchasing Managers’ Index fell to 50.3% last month, from 51.9% in April. Market players are now factoring in the possibility of a pause in the rate hike cycle by the US Federal Open Market Committee, which could benefit the non-yielding metal, Gandhi said.

The price of 22 carat gold in the Mumbai bullion market was 59,856 rupees per 10 gm plus 3% goods and service tax, while that of 24 carat gold was 60,096 rupees per 10 gm plus GST, and price of 18 carat gold was 55,047 rupees per 10 gm plus GST.

The spot gold-silver ratio, also known as the mint ratio, was higher at 83.27, indicating that gold had 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 33 points, or 0.2%, at 16140 at 1840 IST today.

The June and August gold contracts recorded turnovers of 17.38 bln rupees and 1.90 bln rupees, respectively. At 1840 IST, the July and September silver contracts saw turnovers of 22.69 bln rupees and 658.66 mln rupees, respectively.

* At 1840 IST, following were the most active contracts of bullion:
-June gold was up 0.1% at 59,925 rupees per 10 gm on MCX
-June gold was up 0.2% at $1,979.15 an ounce on COMEX
-July silver was up 0.1% at 71,948 rupees per kg on MCX
–July silver was flat at $23.63 an ounce on COMEX

* Outlook for the rest of the session:
-MCX gold seen at 59,450–60,300 rupees per 10 gm
-COMEX gold seen at $1,940–$1,994 an ounce
-MCX silver seen at 71,300-73,400 rupees per kg
-COMEX silver seen at $23.35-$24.10 an ounce

End

US$1 = 82.60 rupees

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

Edited by Rajeev Pai

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Source: Cogencis