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Monday, December 5, 2022

India Bullion: MCX gold flat; COMEX down on firm US bond yields

Informist, Friday, Oct 7, 2022


By Chinmay Mungse


MUMBAI – GOLD contracts on the Multi Commodity Exchange of India and the COMEX were flat today as losses tracking benchmark COMEX contracts were offset by a weaker rupee against the US dollar. A weaker rupee makes the greenback-denominated commodity more expensive for Indian investors. 


* Benchmark GOLD contracts on the COMEX were in the red today as yields on US treasury bonds rose today, lowering the demand for the non-interest-yielding precious metal. 


* Hawkish remarks from the US Federal Reserve Governor Christopher Waller raised expectations of another aggressive rate hike from the central bank to tame the rising inflation.


* Waller said that the US Fed needs to keep raising interest rates till early next year to bring down the stubbornly high inflation, suggesting that he sees little reason to soften the aggressive stance. 


* “Gold prices softened after another round of hawkish Fed-speak. Gold is entering the consolidation mode as traders await non-farm payrolls (data),” said Edward Moya, senior market analyst at OANDA. 


* Investors and market participants await the US non-farm payrolls data, which is due for release later in the day, for further cues on rate hikes. According to a poll by Dow Jones, the non-farm payrolls data is expected to show a rise of 275,000 in September, against the 315,000 rise in the previous month. 


* “The markets seem convinced that the central bank will tighten its monetary policy faster to curb inflation and have been pricing in another supersized 75 bps increase in November. Hence, the key labour market report will help determine the next leg of a directional move for gold,” fxstreet.com said in a report.


* At 1633 IST, the most-active contracts of bullion were:
   –December gold was flat at 51,908 rupees per 10 gm on MCX
   –December gold was down 0.2% at $1,718 an ounce on COMEX
   –December SILVER was up 0.2% at 61,465 rupees per kg on MCX
   –-December silver was up 0.2% at $20.69 an ounce on COMEX


* Outlook for the evening session:

   –MCX gold seen at 51,740-52,180 rupees per 10 gm
   –COMEX gold seen at $1,704-$1,734 an ounce
   –MCX silver seen at 60,900-62,500 rupees per kg
   –COMEX silver seen at $20.30-$20.94 an ounce




US$1 = 82.32 rupees

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


Edited by Vidhi Verma


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Source: Cogencis

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