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India Bullion: Gold flat on mixed cues; may rise on haven demand

Informist, Friday, Jun 17, 2022

 

By Chinmay Mungse

 

MUMBAI – Gold contracts were trading flat today on the Multi Commodity Exchange of India and COMEX as rise in the dollar index was offset by safe-haven demand after the 75-basis point rate hike by the US Federal Reserve fanned recession fears.

 

* A strong dollar makes dollar-denominated precious metals expensive for those holding other currencies.

 

* In the previous two sessions, GOLD had benefited from risk-off sentiment and safe-haven demand as global central banks tightened monetary policy to tame inflation. Today, however, investors booked profits early in the day, which put pressure on the yellow metal.

 

* However, the US Fed’s decision to raise interest rates has triggered recession fears, thus boosting the safe-haven demand for the precious metals.

 

* “Gold has resumed its role as a safe haven as financial markets worry about aggressive central bank tightening globally and deceleration in US economic data,” said Ed Moya, senior market analyst at foreign exchange company Oanda Corp.

 

* Investors also took comfort in the fact that the US Fed has lowered the growth projection for 2022 to 1.7%, from 2.2% projected in March.

 

* “This dragged the US bond yields away from over a two-decade high touched earlier this week, which, along with mounting recession fears, could help limit deeper losses for gold,” said fxstreet.com in a report.

 

* At 1700 IST, the most-active contracts of bullion were:
   –August gold was up 0.1% at 50,993 rupees per 10 gm on MCX
   –August gold was flat at $1,848.4 an ounce on COMEX
   –July SILVER was flat at 61,530 rupees per kg on MCX
   –-July silver was down 0.2% at $21.85 an ounce on COMEX

 

* Outlook for the evening session:
   –MCX gold seen at 50,500-51,200 rupees,
   –COMEX gold seen at $1,824-$1,860
   –MCX silver seen at 60,665-62,020 rupees
   –COMEX silver seen at $21.48-$22.31

End

 

US$1 = 78.07 rupees

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

 

Edited by Ashish Shirke

 

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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