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India Bullion:MCX gold dn as firm dlr index drags COMEX; Fed meet eyed

Informist, Monday, Sep 19, 2022


By Chinmay Mungse


MUMBAI – GOLD contracts on the Multi Commodity Exchange of India were trading lower today as a firm dollar index dragged contracts on COMEX and due to weak demand for the safe-haven asset ahead of the US Federal Reserve’s interest rate decision later this week. 


* The US dollar index hovered near the 110 mark, while yields on the US treasury bonds also rose today, dampening the demand for the precious metal. 


* Investors and market participants are now bracing for the US Fed’s two-day monetary policy meeting which commences on Tuesday. It is expected that the central bank will raise interest rates by 75 basis points in an attempt to cool the rising inflation in the country. 


* “The markets have factored in a 75-bps rate hike from the Fed. However, if a 100 bps rate hike is announced then the dollar will move higher and gold will underperform,” said Sriram Iyer, senior analyst at Reliance Securities.


* According to the CME FedWatch tool, 79% of market participants are anticipating a 75-basis-point hike in interest rates, while 21% are expecting the central bank to raise interest rates by 100 bps.


* At 1643 IST, the most-active contracts of bullion were:
   –December gold was down 0.5% at 49,390 rupees per 10 gm on MCX
   –December gold was down 0.6% at $1,673.1 an ounce on COMEX
   –December SILVER was flat at 56,784 rupees per kg on MCX
   –-October silver was flat at $19.29 an ounce on COMEX


* Outlook for the evening session:

   –MCX gold seen at 49,150-49,550 rupees
   –COMEX gold seen at $1,672-$1,696
   –MCX silver seen at 56,100-57,200 rupees
   –COMEX silver seen at $19.00-$19.88




US$1 = 79.77 rupees

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


Edited by Arshad Hussain



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Source: Cogencis

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