Informist, Tuesday, Dec 26, 2023
By J Navya Sruthi
MUMBAI – Futures contracts of GOLD traded in green today on the Multi Commodity Exchange of India tracking those on the COMEX on expectation of interest rate cuts by the US Federal Reserve next year, and lower yields on US Treasury bills, experts said.
Lower bond yields pushed gold prices higher, as both are inversely related. On Friday, the 10-year US bond yield was hovering near its three-month low at 3.9%. At 1621 IST today, the 10-year US bond yield was at 3.89%.
The US personal consumption expenditure index, the Fed’s preferred inflation gauge, fell 0.1% on month in November. The latest reading, which marked the first decline since April 2020, has consolidated market expectations that the Fed will lower interest rates soon, Dow Jones quoted Xinan Futures as saying in a note.
“The Federal Reserve’s preferred gauge of underlying inflation barely rose in November and trailed policymakers’ 2% target by one measure, reinforcing the central bank’s pivot toward interest-rate cuts next year,” Kotak Securities said in a report.
Fed Funds futures traders expect a 75.6% chance of a rate cut by the US central bank in March, according to CME Group’s FedWatch Tool.
Investors will now take cues from the US house price index, due later today.
SILVER prices were up on the MCX, taking cues from gold.
At 1625 IST, the following were the most active contracts of bullion:
-February gold was up 0.3% at 63,133 rupees per 10 gm on MCX
-February gold was up 0.2% at $2,073.5 an ounce on COMEX
-March silver was up 0.2% at 75,521 rupees per kg on MCX
–March silver was down 0.1% at $24.43 an ounce on COMEX
Outlook for the rest of the session:
-MCX gold seen at 62,085-63,855 rupees per 10 gm
-COMEX gold seen at $2,040.4-$2,071.6 an ounce
-MCX silver seen at 74,080-76,825 rupees per kg
-COMEX silver seen at $23.96-$24.5 an ounce
End
US$1 = 83.18 rupees
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Akul Nishant Akhoury
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