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India Bullion: Rises tracking COMEX on weak dollar; US CPI data eyed

Informist, Monday, Sep 12, 2022


By Chinmay Mungse


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


* The US dollar index continued its sharp fall from last week and touched a more than three-week low of 107.81 today. A softer US dollar makes greenback-denominated commodities cheaper for holders of other currencies thus, boosting their demand.


* Investors and market participants are now eyeing the US consumer price index data, scheduled to be released Tuesday. The US Federal Reserve Chair Jerome Powell and various members of the central bank have said that future rate hikes will be data-dependent, hence the US CPI and producer price index data will be crucial to influence interest rate hikes from the Fed.


* The US CPI inflation is expected to rise 8% on year during August, lower than the previous month’s reading of 8.5% on-year rise. “Inflation is expected to be lower and will support gold prices as the expectations of a jumbo rate hike from the US Fed will ease,” said Manoj Jain, research head at Prithvi Finmart.


* According to reports, market participants have factored in a 75-basis-point rate hike from the US Fed in its Sep 20-21 meeting, which also pressured the US dollar, supporting bullion prices.


* “Given that the markets have already priced in a 75 bps Fed rate hike move in September, subdued action around the US treasury bond yields turns out to be a key factor weighing on the greenback,” said fxstreet.com.


* At 1641 IST, the most-active contracts of bullion were:
   –October gold was up 0.3% at 50,660 rupees per 10 gm on MCX
   –December gold was up 0.6% at $1,738.4 an ounce on COMEX
   –December silver was up 2% at 56,131 rupees per kg on MCX
   –-October silver was up 2.2% at $19.09 an ounce on COMEX


* Outlook for the evening session:

   –MCX gold seen at 50,300-50,900 rupees
   –COMEX gold seen at $1,710-$1,740
   –MCX silver seen at 54,450-55,700 rupees
   –COMEX silver seen at $18.44-$19.00




US$1 = 79.52 rupees

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


Edited by Tanima Banerjee



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Source: Cogencis

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