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India Bullion: Flat on MCX, down on COMEX on hawkish policy changes

Informist, Monday, Mar 21, 2022


By Chinmay Mungse


MUMBAI – GOLD contracts on the Multi Commodity Exchange of India were flat today as losses tracking the benchmark COMEX contracts were offset by the rupee’s weakness against the US dollar.


* Benchmark gold contracts on COMEX were a tad lower today as hawkish policies by major central banks to tackle global inflation weighed on gold prices.


* The US Federal Reserve raised interest rates by 25 basis points in its March meeting, while the Bank of England raised interest rates in tandem with the Fed. The European Central Bank decided in its meeting that they will be winding up asset purchases in the Jul-Sep quarter. 


* The Fed’s indication of six more rate hikes through the end of the year fuelled market expectations of a 2% rise in interest rates by the end of the year, which pressured bullion prices, said analysts.


* “St Louis Fed President Bullard had called for significantly higher interest rates last week,” Commerzbank AG said. “In his view, a rate level of over 3% would be justified in order to curb inflation.”


* However, the downside to gold prices was capped by a higher safe-haven demand as the war between Ukraine and Russia escalated, with the latter destroying the Ukrainian arms depot with hypersonic missiles on Saturday and damaging the port city of Mariupol. 


* “The Ukraine situation is showing no indications of abating, with Ukraine rejecting Russian calls to cede Mariupol, the port city encircled with no food, water, or power, and ferocious fighting showing no signs of easing,” said Mahesh Kumar, head of commodity market at Abans Group.


* In the domestic market, the rupee’s weakness against the US dollar supported gold prices. A weaker rupee makes the greenback priced commodity expensive for Indian investors.


* At 1637 IST, the most-active contracts of bullion were:
   –April gold was flat at 51,505 rupees per 10 gm on MCX
   –April gold was down 0.2% at $1,925.8 an ounce on COMEX
   –May SILVER was up 0.4% at 68,154 rupees per kg on MCX
   –-May silver was up 0.4% at $25.18 an ounce on COMEX


* Outlook for the evening session:
   –MCX gold seen at 51,210-52,000 rupees
   –COMEX gold seen at $1,928-$1,945
   –MCX silver seen at 67,400-68,950 rupees
   –COMEX silver seen at $24.80-$25.90



US$1 = 76.12 rupees

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


Edited by Pranav S. Joshi


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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Source: Cogencis

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