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Wednesday, August 10, 2022

India Bullion: Down on MCX, COMEX on firm dollar; FOMC minutes eyed

Informist, Wednesday, Jul 6, 2022


By Chinmay Mungse


MUMBAI – GOLD and SILVER contracts on the Multi Commodity Exchange of India and COMEX were trading lower today as the US dollar strengthened against a basket of major currencies, dulling the demand for the precious metals. 


* The demand for the safe-haven US currency drove the US dollar index to a near 20-year high of 106.98, which pressured bullion prices. 


* “The dollar index is hovering near 20-year highs, lowering the demand for the precious metals,” said Tapan Patel, senior analyst at HDFC Securities. “Bullion bulls have been wounded for weeks by the US Federal Reserve’s rate cudgel as policymakers at the central bank showed no (signs of) backing down in their aim to tame inflation.”


* Investors are also eyeing the US Fed’s meeting minutes, due to release later today. The minutes are expected to indicate a 75-basis-point interest rate hike.


* Analysts believe that the market has factored in the rate hike, though expectations of further hawkish comments from the central bank are expected to keep the bulls away from the precious metals. 


* Investors and market participants are also focusing on the US labour market data, which is due for release later this week. “If the labour market in the US is robust, the US Fed will take an aggressive path to tame inflation, which might pressure bullion prices further,” said Sriram Iyer, senior analyst at Reliance Securities.


* At 1654 IST, the most active contracts of bullion were:
   –August gold was down 0.4% at 51,112 rupees per 10 gm on MCX
   –August gold was down 0.2% at $1,760.5 an ounce on COMEX
   –September silver was down 0.2% at 56,750 rupees per kg on MCX
   –-September silver was down 0.1% at $19.05 an ounce on COMEX


* Outlook for the evening session:
   –MCX gold seen at 50,900-51,600 rupees,
   –COMEX gold seen at $1,720-$1,795
   –MCX silver seen at 56,084-58,312 rupees
   –COMEX silver seen at $18.69-$19.82




US$1 = 79.30 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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