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India Bullion:Dn tailing COMEX as US dlr, bond ylds rise; US CPI eyed

Informist, Friday, Jun 10, 2022


By Chinmay Mungse


MUMBAI – GOLD and SILVER contracts on the Multi Commodity Exchange of India and COMEX were trading in the red today weighed by a stronger dollar and higher yields on US Treasury bills.


* Worries of higher inflation and an aggressive stance by the US Federal Reserve in its upcoming monetary policy meeting kept the dollar index high ahead of the release of the US inflation data.


* “The US Fed will raise its benchmark interest rate by 50 basis points in June and July, with the likelihood of a similar rise in September,” said Angel One Commodities in a report.


* In its meeting on Thursday, European Central Bank kept its interest rates unchanged. However, ECB President Christine Lagarde said that the bank will be hopping on the cycle of interest rate hikes, hinting at a 50-bps rate hike in July.


* “The impact of the ECB’s decision was seen on the US dollar, which rose as there was lack of clarity from the central bank,” said Sriram Iyer, senior analyst at Reliance Securities.


* Investors are now awaiting the release of US consumer price index data later today to gauge the steps the US Fed will be taking to curb inflation. Market participants expect US May consumer price index inflation to rise 8.3% on year, which would be the third straight month of a reading above 8%.


* “Higher inflation will keep the US Fed on its toes, and it is likely continue raising interest rates till September in that case,” added Iyer.


* At 1636 IST, the most-active contracts of bullion were:
   –June gold was down 0.4% at 50,813 rupees per 10 gm on MCX
   –June gold was down 0.4% at $1,844.7 an ounce on COMEX
   –July silver was down 0.9% at 60,874 rupees per kg on MCX
   –-July silver was down 1.3% at $21.53 an ounce on COMEX


* Outlook for the evening session:
   –MCX gold seen at 50,700- 51,200 rupees,
   –COMEX gold seen at $1,835-$1,865
   –MCX silver seen at 61,000-62,220 rupees
   –COMEX silver seen at $21.55-$22.40.



US$1 = 77.83 rupees

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


Edited by Namrata Rao


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Source: Cogencis

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