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India Bullion:Up on safe haven demand as Russia-Ukraine tensions rise

Informist, Wednesday, Sep 21, 2022


By Chinmay Mungse


MUMBAI – GOLD and SILVER contracts on the Multi Commodity Exchange of India and COMEX were trading higher today as escalations in the geopolitical tensions between Ukraine and Russia boosted the safe-haven demand for the precious metals. 


* Russian President Vladimir Putin announced a partial military mobilisation, which dampened the investor appetite for riskier assets and drove the demand for the safe-haven asset higher. 


* Russia will take necessary steps to defend its sovereignty and defend territory with all available means, said Putin. According to reports, the move threatened to escalate the conflict further after Moscow moved to stage votes on annexing the regions of Ukraine it still controls.


* “Against the backdrop of concerns about a deeper global economic downturn, the risk of a further escalation in the Russia-Ukraine conflict drives some haven flows towards gold,” said fxstreet.com in a report.


* However, the upside to bullion prices was limited because the US dollar index rose to a fresh 20-year high of 110.87 earlier today. Investors anticipated a 75 basis point interest rate hike from the US Federal Reserve in its policy meeting which concludes later today.


* Analysts believe that the market has already factored in a 75 bps rate hike. Investors and market participants are currently waiting to gauge the Fed’s stance on inflation and the magnitude of future rate hikes. 


* At 1723 IST, the most-active contracts of bullion were:
   –December gold was up 0.7% at 49,734 rupees per 10 gm on MCX
   –December gold was up 0.7% at $1,682.7 an ounce on COMEX
   –December silver was up 1.7% at 57,330 rupees per kg on MCX
   –-October silver was up 1.9% at $19.47 an ounce on COMEX


* Outlook for the evening session:

   –MCX gold seen at 49,000-49,850 rupees
   –COMEX gold seen at $1,668-$1,700
   –MCX silver seen at 56,300-57,450 rupees
   –COMEX silver seen at $19.10-$20.00




US$1 = 79.97 rupees

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


Edited by Manisha Baxla



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Source: Cogencis

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