India Bullion: Falls on MCX, COMEX as US bond yields rise

Informist, Monday, Oct 4, 2021

By Sayantan Sarkar

MUMBAI – Bullion futures on the Multi Commodity Exchange of India and COMEX fell today as higher yields on US Treasury bills dampened sentiment in the market. 

* GOLD and SILVER demand dips when yields rise as it increases the opportunity cost of holding non-yielding assets. 

* On the bullish front, data showed that the cost of goods and services in the US rose sharply in August and pushed inflation in the country to a 30-year-high. Concerns about rising prices had supported gold prices earlier in the day as investors use the yellow metal as a hedge against inflation. 

* According to data published on Friday, speculative net long positions in gold totalled only 30,800 contracts on Sep 28. “They therefore plunged by another 34% week-on-week and have fallen by more than half in the space of two weeks,” Commerzbank AG said in a report. 

* Gold holdings with SPDR Gold Trust fell by 3.49 tn on Friday to 986.54 tn, according to data on the website of the world’s largest gold exchange-traded fund.

* At 1648 IST, the most active contracts of bullion were:
   –December gold down 0.3% at 46,349 rupees per 10 gm on MCX
   –December gold down 0.2% at $1,754.40 an ounce on COMEX
   –December silver down 0.6% at 60,161 rupees per kg on MCX
   –-December silver down 0.2% at $22.50 an ounce on COMEX

* Outlook for the evening session by Angel One Commodities:
   –MCX gold seen at 45,920-46,990 rupees
   –COMEX gold seen at $1,734-$1,775
   –MCX silver seen at 58,200-61,180 rupees
   –COMEX silver seen at $22.17-$22.83

End

US$1 = 74.31 rupees

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

Edited by Rajendra Masur

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Source: Cogencis