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India Bullion: Gold rises on MCX, COMEX on weak dollar; ECB meet eyed

Informist, Tuesday, Jul 19, 2022


By Chinmay Mungse


MUMBAI – GOLD contracts on the Multi Commodity Exchange of India and COMEX rose today, supported by a fall in the dollar index which boosted demand for the precious metal. 


* Gold prices were underpinned by easing worries that the US Federal Reserve will increase policy rate by 100 basis points in its July meeting. As per CME’s FedWatch Tool, expectations that the US central bank will raise rates by 1% were as high as 80% last week and have come down to near 30%.


* “Odds of a 100 bps interest rate hike for the July interest rate decision have trimmed after the release of the (University of Michigan’s) long-run inflation expectations. The economic data landed at 2.8% lower than June’s print of 3.1%,” said fxstreet.com in a report.


* Investors now await the outcome of the European Central Bank’s meeting on Wednesday. “If the ECB decides to raise interest rates, it would support the euro against the dollar. If the dollar index falls after ECB rate hikes would support precious metals,” said Manoj Jain, research head at Prithvi Finmart.


* Investors and market participants are also waiting for fresh triggers from the US to gauge the Fed’s rate hike path.


* At 1646 IST, the most active contracts of bullion were:
   –June gold was up 0.2% at 50,461 rupees per 10 gm on MCX
   –June gold was up 0.3% at $1,716.2 an ounce on COMEX
   –September SILVER was down 0.3% at 55,947 rupees per kg on MCX
   –-September silver was down 0.3% at $18.755 an ounce on COMEX


* Outlook for the evening session:
   –MCX gold seen at 50,150-50,550 rupees
   –COMEX gold seen at $1,700-$1,722
   –MCX silver seen at 55,650-56,500 rupees
   –COMEX silver seen at $18.50-$19.35.





US$1 = 79.94 rupees

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


Edited by Deepshikha Bhardwaj



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Source: Cogencis

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