Informist, Thursday, Jan 11, 2024
By J Navya Sruthi
MUMBAI – Gold futures were up today on the Multi Commodity Exchange of India, as contracts on COMEX rose after yields on US Treasury bills fell ahead of the US inflation data later in the day, analysts said.
Prices of GOLD and bond yields are inversely related, and a fall in bond yield attracts investors to the precious metal.
Yield on the 10-year US Treasury bill was 3.9% lower than Wednesday’s close of 4.04%.
Dollar and bond yields may move south after the release of major economic data from the US, as it would shed some light on when the Federal Reserve would start cutting rates, ICICI Securities said in a note.
The dollar index also softened ahead of the US inflation data. A softer greenback makes commodities priced in dollars cheaper and more attractive for investors holding other currencies. The dollar index, which measures the strength of the greenback against a basket of six major currencies, was at 102.33.
US headline inflation data is likely to show that price pressure has continued to ease further and jobless claims data is projected to show that a greater number of people filed for benefits, ICICI Securities said in a note.
Analysts polled by Dow Jones expect the headline inflation to inch higher to 3.2% year-on-year in December from 3.1% in November, while the core consumer price index is expected to ease to 3.8% on yearly basis from 4% a month ago.
Dovish remarks by Fed officials also supported the yellow metal. “…We have seen meaningful progress on restoring balance to the economy and bringing inflation down,” John C. Williams, president and chief executive officer of the Federal Reserve Bank of New York, said on Wednesday.
Demand for safe haven assets may increase because of escalating tension in West Asia, ICICI Securities said in a note.
SILVER prices rose taking cues from the yellow metal. However, fears of a fragile Chinese economic recovery restricted the upside, analysts said.
At 1640 IST, the following were the most active contracts of bullion:
-February gold was up 0.2% at 62,133 rupees per 10 gm on MCX
-February gold was up 0.4% at $2,036.3 an ounce on COMEX
-March silver was up 0.2% at 72,144 rupees per kg on MCX
–March silver was up 0.3% at $23.14 an ounce on COMEX
Outlook for the rest of the session:
-MCX gold seen at 61,685-62,555 rupees per 10 gm
-COMEX gold seen at $1,996.81-$2,059.19 an ounce
-MCX silver seen at 71,280-72,740 rupees per kg
-COMEX silver seen at $22.38-$23.48 an ounce
End
US$1 = 83.02 rupees
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Ashish Shirke
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