Informist, Thursday, Feb 22, 2024
By Sandeep Sinha
MUMBAI – Futures contracts of gold on the Multi Commodity Exchange of India and the COMEX rose today because of a weaker dollar, which makes commodities priced in the greenback cheaper for holders of other currencies, boosting demand for precious metals. However, the upside in gold remained restricted in the domestic market due to a sharp appreciation in the rupee against the dollar.
The dollar index, which measures the strength of the greenback against a basket of six major currencies, was down 0.3% at 103.69 on profit-taking. The sentiment in yellow metal is likely to remain muted as the US Federal Reserve’s minutes of January meeting showed policymakers seem content to leave rates higher for longer until they are sure inflation will keep cooling.
The continued outflows from gold exchange-traded funds also weighed on bullion sentiment. On Wednesday, gold holdings with the SPDR Gold Trust, the world’s largest gold-backed ETF, fell by 6.34 tn to 839.82 tn. The fund has a market value of $54.06 bln.
Investors will also take cues from weekly US jobless claims, US flash manufacturing and services purchasing managers’ index, and existing home sales data later today. Analysts polled by Dow Jones had estimated the jobless claims to come in at 216,000, up by 4,000 from last week.
“Weekly US jobless claims will also be closely watched by investors; however, unless the US services and manufacturing PMIs turn out to be a significant miss, gold will find it difficult to stage a sustainable rally. Outlook remains bearish in short term,” Praveen Singh, associate vice-president, fundamental currencies and commodities at Sharekhan by BNP Paribas, said.
The spot gold-silver ratio, also known as the Mint Ratio, was lower at 87.94 to 1, which indicates that gold has underperformed silver. The ratio measures the ounces of silver required to buy an ounce of gold.
SILVER prices rose, taking firm cues from COMEX and short-covering by traders after a sharp fall on Wednesday. However, the upside remained limited due to weakness in industrial metals and concerns about China’s economic growth.
MCX Bulldex, an index tracking the real-time performance of gold and silver futures on the MCX, was up just 11 points at 15983 points.
At 1825 IST, the April and June gold contracts recorded turnovers of 9.65 bln rupees and 625.69 mln rupees, respectively. At the same time, the March and May silver contracts saw turnovers of 13.66 bln rupees and 6.26 bln, respectively.
* At 1825 IST, the following were the most active contracts of bullion:
–April gold was up 0.1 at 62,134 rupees per 10 gm on MCX
–April gold was up 0.2 at $2,038.10 an ounce on COMEX
–March silver was up 0.4 at 70,897 rupees per kg on MCX
–-March silver was up 0.9% at $23.29 an ounce on COMEX
* Outlook for the rest of the session:
–MCX gold seen at 61,750–62,550 rupees per 10 gm
–COMEX gold seen at $2,010–$2,058 an ounce
–MCX silver seen at 70,100-71,600 rupees per kg
–COMEX silver seen at $22.65-$23.40 an ounce
End
US$1 = 82.84 rupees
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Manisha Baxla
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