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India Bullion: Up tailing COMEX as higher EU inflation lifts demand

Informist, Friday, Sep 30, 2022

 

By Chinmay Mungse

 

MUMBAI – GOLD and SILVER contracts on the Multi Commodity Exchange of India and the COMEX traded higher today as higher inflation in the Eurozone boosted the demand for precious metals. 

 

* Inflation in the 19 countries comprising the European Union rose to a record 10% on year in September. Inflation is at its highest level since 1997

 

* “The expectations of a 100 basis points rate hike from the European Central Bank have risen, which are in turn supporting the Euro and pressuring the US dollar. A softer US dollar index is supporting gold prices,” said Sriram Iyer, senior analyst at Reliance Securities.

 

* According to analysts, the markets were expecting a 50-75 bps rate hike from the ECB in its October meeting before the release of inflation data. 

 

* Yields on the US treasury bonds also slid from 3.8% to 3.6% today, further boosting the demand for precious metals. 

 

* Investors and market participants are now eyeing the US personal consumption expenditure index, which is scheduled to release later in the day. According to reports, the US PCE inflation is expected to rise to 6.6% on year in August, while the core PCE inflation, which excludes volatile food and energy prices, is expected to rise to 4.7% on year in August. 

 

* Higher PCE inflation is likely to prompt the US Fed to raise interest rates further in its November policy meeting. According to the CME FedWatch tool, nearly 60% of the markets expect the central bank to raise interest rates by 75 bps again in November. 

 

* At 1705 IST, the most-active contracts of bullion were:
   –December gold was up 0.2% at 50,281 rupees per 10 gm on MCX
   –December gold was up 0.2% at $1,672.6 an ounce on COMEX
   –December silver was up 1.1% at 56,795 rupees per kg on MCX
   –-October silver was up 1.6% at $19.01 an ounce on COMEX

 

* Outlook for the evening session:

   –MCX gold seen at 49,800-50,400 rupees per 10 gm
   –COMEX gold seen at $1,620-$1,685 an ounce
   –MCX silver seen at 55,700-57,200 rupees per kg
   –COMEX silver seen at $18.50-$19.34 an ounce

 

 

End

 

US$1 = 81.34 rupees

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

 

Edited by Vidhi Verma

 

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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© Informist Media Pvt. Ltd. 2022. All rights reserved.

 

Source: Cogencis

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