Informist, Monday, Dec 4, 2023
By J Navya Sruthi
MUMBAI – Futures contracts of GOLD hit an all-time high during the day on the Multi Commodity Exchange of India and COMEX on rising bets that the US Federal Reserve Bank would hold rates steady and cut rate from March itself. However, prices came off from the high due to profit taking and strength in the dollar, which makes dollar-denominated precious metals expensive for buyers of other currencies. The dollar index, which measures the strength of the greenback against a basket of six major currencies, was up 0.2% at 103.38.
The positive sentiment in the yellow metal was also supported by safe-haven demand and inflows in gold exchange-traded funds.
Today, gold hit a record high of 64,063 rupees per 10 gm on the domestic exchange. On a yearly basis, it has risen 14.6%. On the COMEX, the precious metal hit a fresh lifetime high of $2,152.3 per ounce today and gained nearly 13.8% year-to-date.
On Friday, gold holdings with SPDR Gold Trust, the world’s largest gold-backed ETF, rose by 2.31 tn at 878.82 tn. The fund has a market value of $57.77 bln.
“Traders doubled down on these bets, despite Fed Chair Jerome Powell’s pushback against rate-cut expectations. Markets now see a 60% chance of the US central bank reducing its policy rate in March next year,” Kedia Advisory said in a note.
On Friday, Fed Chair Jerome Powell said in a speech that monetary policy of the US is “well into restrictive territory”, which indicated that the central bank may be done with interest-rate hikes.
“The speculative buying interest for gold is likely to continue in the near term, given the ongoing geopolitical tensions and expectations of lower interest rates in the US,” ING Economics said in a report.
Investors will take cues from the US factory orders data from October to be released later in the day.
SILVER prices fell due to profit taking and weak cues from industrial metals.
At 1655 IST, the following were the most-active contracts of bullion:
-February gold was up 0.6% at 63,471 rupees per 10 gm on MCX
-February gold was down 0.1 at $2,086.9 an ounce on COMEX
-March silver was down 0.7% at 77,553 rupees per kg on MCX
–March silver was down 1.2% at $25.54 an ounce on COMEX
Outlook for the rest of the session:
-MCX gold seen at 62,900-63,800 rupees per 10 gm
-COMEX gold seen at $2,050-$2,130 an ounce
-MCX silver seen at 76,800-79,500 rupees per kg
-COMEX silver seen at $25.15-$26.0 an ounce
End
US$1 = 83.36 rupees
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Maheswaran Parameswaran
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