14.8 C
New York
Sunday, October 2, 2022

India Bullion: Falls on MCX, COMEX on firm dlr, higher rate hike bets

Informist, Thursday, Jul 14, 2022

 

By Chinmay Mungse

 

MUMBAI – GOLD and SILVER contracts fell significantly on the Multi Commodity Exchange and COMEX today due to a stronger dollar and expectations of a hawkish stance by the US Federal Reserve to tame inflation. 

 

* The most active August gold contracts on the MCX and COMEX fell more than 1% today after the dollar index, which measures strength in the US currency against a basket of six major currencies, rose to 108.72, the highest level since October 2002.

 

* The likelihood of aggressive monetary policy tightening by the Fed increased after the data on Wednesday showed that CPI inflation in the US accelerated to 9.1% in June, the highest in nearly 41 years.

 

* “Bullion could remain under pressure amid fears that the Federal Reserve could go for a more aggressive interest rate hike this month after data showed US inflation sky-rocketed in June,” said Sriram Iyer, senior analyst at Reliance Securities.

 

* According to the CME FedWatch Tool, markets are pricing in a nearly 80% probability of a 100 basis point increase in the interest rates by the Fed in its meeting later this month.

 

* The expectations of a 100 bps rate hike also drove US treasury bond yields higher, which further dulled the demand for the non-interest yielding bullion.

 

* However, a steep interest rate hike could aggravate worries of a global recession, which could limit the fall in bullion prices. “The Fed’s ‘front-loading’ commitment may not go down too well for the market, as a recession looks imminent,” said fxstreet.com

 

* At 1651 IST, the most-active contracts of bullion were:
   –August gold was down 0.8% at 50,383 rupees per 10 gm on MCX
   –August gold was down 1.5% at $1,710.6 an ounce on COMEX
   –September silver was down 1.8% at 56,124 rupees per kg on MCX
   –-September silver was down 2.9% at $18.585 an ounce on COMEX

 

* Outlook for the evening session:
   –MCX gold seen at 49,940-50,800 rupees
   –COMEX gold seen at $1,703-$1,730
   –MCX silver seen at 55,870-57,810 rupees
   –COMEX silver seen at $18.57-$19.23

 

End

 

US$1 = 79.88 rupees

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

 

Edited by Aditya Sakorkar

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. 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.

 

Informist Media Tel +91 (11) 4220-1000

Send comments to [email protected]

 

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

Source: Cogencis

Related Articles

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Stay Connected

11,299FansLike
12,893FollowersFollow
748FollowersFollow
- Advertisement -

Latest Articles

Popular Articles