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India Bullion: MCX, COMEX gold at multi-month low ahead of ECB meet

Informist, Thursday, Jul 21, 2022


By Chinmay Mungse


MUMBAI – GOLD and SILVER contracts on the Multi Commodity Exchange and COMEX fell sharply today ahead of the European Central Bank’s monetary policy meeting outcome later in the day.


* The most-active August gold contracts on COMEX hit a 16-month low of $1,678.7 per ounce, while the same month contract on the MCX hit a two-month low of 49,703 rupees per 10 gm today, as investors seemed nervous about the wave of impending rate hikes by major central banks, starting with the European Central Bank today.


* The prospect of further interest rate hikes by major central banks is becoming a key factor, driving flows away from the non-yielding gold, said FXStreet.com in a report.


* According to reports, the ECB’s governing council is weighing a 50-basis-point interest rate hike at its meeting today, as it looks to curb the multi-decade-high inflation. 


* Bank of England Governor Andrew Bailey also hinted at the possibility of raising interest rates by 50 bps in August, following higher inflation data from the UK. The country’s consumer price index inflation rose to 9.4% on year for June, the highest since 1982.


* “Higher-than-expected inflation in the UK bolstered expectations of an aggressive interest rate hike by the Bank of England,” said Sriram Iyer, senior analyst, Reliance Securities.


* The US Federal Reserve is also expected to further raise interest rates by 75 bps in its upcoming meeting on Jul 26-27.


* At 1642 IST, the most active contracts of bullion were:
   –June gold was down 1% at 49,721 rupees per 10 gm on MCX
   –June gold was down 1.2% at $1,680.2 an ounce on COMEX
   –September silver was down 2.4% at 54,265 rupees per kg on MCX
   –-September silver was down 2.8% at $18.145 an ounce on COMEX


* Outlook for the evening session:
   –MCX gold seen at 49,500-50,200 rupees
   –COMEX gold seen at $1,672-$1,702
   –MCX silver seen at 53,700-55,400 rupees
   –COMEX silver seen at $18.00-$18.80.





US$1 = 79.94 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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