India Bullion: MCX up tailing COMEX on weak dollar, Omicron concerns

Informist, Tuesday, Nov 30, 2021

By Chinmay Mungse

MUMBAI – Gold contracts on the Multi Commodity Exchange of India and COMEX were up today as the US dollar softened against a basket of major currencies.

* SILVER contracts on MCX were also trading higher tracking gains in the benchmark COMEX contracts.

* The outbreak of the new strain of COVID-19 virus boosted safe-haven demand for the precious metals. “If Omicron variant of the virus mutates faster than the earlier versions then the safe-haven demand will elevate further,” said Manoj Jain, head of commodity research at Prithvi Finmart.

* If the pandemic continues, it could hamper global economic activities. “Investors remain cautious and are gauging the impact of the Omicron variant on the global economy,” said Sriram Iyer, senior analyst at Reliance Securities.

* However, US President Joe Biden has said that his administration will not impose lockdowns in response to the threat of Omicron. Experts believe that this could curb some safe-haven appeal. 

* In addition, the upside in prices today was capped by bets over an early hike in interest rates by the US Federal Reserve. 

* The US Fed meeting is scheduled in the second week of December. “US President Joe Biden nominating Federal Reserve Chair Jerome Powell for a second four-year term increased expectations of a hawkish approach by the US central bank to tackle inflation,” said Angel One Commodities in a report. 

* At 1612 IST, the most-active contracts of bullion were:
   –February GOLD was up 0.7% at 48,307 rupees per 10 gm on MCX
   –February gold was up 0.8% at $1,799.2 an ounce on COMEX
   –March silver was up 0.3% at 62,621 rupees per kg on MCX
   –-March silver was up 0.4% at $22.95 an ounce on COMEX

* Outlook for the evening session:
   –MCX gold seen at 47,850-48,240 rupees
   –COMEX gold seen at $1,770-$1,805
   –MCX silver seen at 61,860-63,380 rupees
   –COMEX silver seen at $22.60-$23.28. End

US$1 = 75.16 rupees

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

Edited by Pranav S. Joshi

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Source: Cogencis