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India Bullion: Down as dollar index surges post upbeat US GDP data

Informist, Friday, Jan 28, 2022

 

By Chinmay Mungse

 

MUMBAI – GOLD and SILVER contracts on the Multi Commodity Exchange of India and COMEX were trading in the red today after data showing the US economy grew more than expected in the December quarter strengthened the dollar and brought bullion under pressure.

 

* The US GDP for the December quarter rose at 6.9%, well above analysts’ estimates of a 5.5% increase. For the year 2021, the US economy expanded at 5.7%, the steepest rise in 38 years.

 

* “A sharp rise in the GDP catapulted the dollar index to an 18-month-high which weighed in on bullion prices in the international market,” said Manoj Jain, research head at Prithvi Finmart.

 

* Bullion also came under pressure after the US Federal Reserve’s hawkish stance in its January meeting where it indicated it will hike interest rates as early as March.  

 

* Meanwhile, the World Gold Council said in a report today that gold demand soared by 49% year-on-year to 1,147 tn in the past quarter, its highest level since September quarter of 2019. 

 

* On the domestic front, demand for gold surged 79% to 797.3 tn in 2021 from 446.4 tn the previous year as easing restrictions and growing rate of vaccination against the COVID-19 pandemic boosted sentiment among investors, said the WGC report.

 

* Investors await the US core personal consumption expenditure price index data that will provide a measure for inflation in the country. 

 

* “The bullion market might get some support if today’s PCE (personal consumption expenditure) inflation is on the higher side. If the data is lower than 4.8%, further downside in bullion prices is expected,” said Sriram Iyer, senior analyst at Reliance Securities.

 

* At 1712 IST, the most active contracts of bullion were:
   –April gold was down 0.7% at 47,665 rupees per 10 gm on MCX
   –April gold was down 0.7% at $1,783.3 an ounce on COMEX
   –March silver was down 0.9% at 61,379 rupees per kg on MCX
   –-March silver was down 1% at $22.45 an ounce on COMEX

 

* Outlook for the evening session:
   –MCX gold seen at 47,350-48,355 rupees
   –COMEX gold seen at $1,774-$1,834
   –MCX silver seen at 60,800-63,045 rupees
   –COMEX silver seen at $22.20-$23.34

 

 

 

End

US$1 = 75.04 rupees

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

 

Edited by Deepshikha Bhardwaj

 

 

Cogencis news is now Informist. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

 

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© Informist Media Pvt. Ltd. 2022. All rights reserved.

Source: Cogencis

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