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India Bullion: Up on MCX, COMEX on weak dlr, eased Fed rate hike bets

Informist, Monday, Jul 18, 2022


By Chinmay Mungse


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


* The US retail sales rebounded strongly in June as Americans spent more amid soaring inflation, which could allay fears of an imminent recession and pulled the US dollar lower, boosting the demand for bullion.


* According to the latest data from the US Commerce Department, retail sales rose 1% month-on-month in June, slightly more than analyst expectations of a 0.9% rise. 


* The University of Michigan’s inflation expectation gauge dipped to 2.8% on Friday, easing the expectations of a 100 basis point rate hike from the US Federal Reserve. “Markets are back to pricing a 75 bps July Fed rate hike after Friday’s University of Michigan Inflation expectations gauge dipped,” said fxstreet.com.


* “Median long-run expectations fell to 2.8%, just below the 2.9-3.1% range seen in the preceding 11 months,” said the University of Michigan in its report.

* Investors are now awaiting the European Central Bank’s decision from its July policy meeting on Thursday. “The ECB is expected to announce a 25 bps interest rate hike in its meeting,” said Ajay Kedia, research head at Kedia Comtrade. 


* At 1651 IST, the most-active contracts of bullion were:
   –June gold was up 0.6% at 50,418 rupees per 10 gm on MCX
   –June gold was up 0.7% at $1,714.9 an ounce on COMEX
   –September silver was up 0.6% at 55,939 rupees per kg on MCX
   –-September silver was up 1.7% at $18.88 an ounce on COMEX


* Outlook for the evening session:
   –MCX gold seen at 49,900-50,600 rupees
   –COMEX gold seen at $1,692-$1,732
   –MCX silver seen at 55,000-56,100 rupees
   –COMEX silver seen at $18.35-$19.00.



US$1 = 79.97 rupees

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


Edited by Sushmita Mukherjee


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Source: Cogencis

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