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India Bullion: Up on MCX, COMEX as dollar, US bond yields fall

Informist, Monday, Aug 8, 2022


By Chinmay Mungse


MUMBAI – Gold and silver futures contracts were trading higher today on the Multi Commodity Exchange and COMEX as the dollar index and yields on US Treasury notes fell.


* The dollar index and US bond yields trimmed some of Friday’s gains because of market correction. On Friday, the dollar index rose to a near one-week high of 106.93 following better-than-expected US non-farm payrolls data.


* Non-farm payrolls in the US rose by 528,000 in July, exceeding market expectations of an increase of 260,000.


* This gave rise to expectations of a 75 basis point rate hike by the US Federal Reserve at its meeting in September. According to the CME FedWatch tool, market participants are pricing in a 70% chance that the Fed will raise rates by 75 bps.


* However, this capped the upside in GOLD prices.


* “Gold prices traded up supported by a weaker dollar. However, the upside was capped as stronger than expected US jobs data has raised expectations of aggressive Fed rate hikes,” said Tapan Patel, senior analyst at HDFC Securities.


* Hawkish comments by San Francisco Fed President Mary Daly also weighed on bullion prices. According to reports, Daly said that a 50 bps rate hike isn’t a done deal at the next policy meeting in September.


* Investors are now waiting for US consumer price index data, due Wednesday. Analysts expect US CPI inflation to rise by 0.3% month-on-month in July. “If the US CPI inflation is higher, then the US Fed might continue with an aggressive stance,” said Sriram Iyer, senior analyst at Reliance Securities.


* At 1653 IST, the most-active contracts of bullion were:
   –October gold was up 0.5% at 52,145 rupees per 10 gm on MCX
   –October gold was up 0.4% at $1,798.9 an ounce on COMEX
   –September SILVER was up 1.6% at 58,266 rupees per kg on MCX
   –-September silver was up 2.1% at $20.25 an ounce on COMEX


* Outlook for the evening session:
   –MCX gold seen at 51,700-52,200 rupees
   –COMEX gold seen at $1,770-$1,804
   –MCX silver seen at 57,000-57,750 rupees
   –COMEX silver seen at $19.80-$20.40.



US$1 = 79.66 rupees

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


Edited by Ashish Shirke


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.


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Source: Cogencis

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