Informist, Monday, Oct 10, 2022
By Chinmay Mungse
MUMBAI – Gold and silver contracts fell sharply today on the Multi Commodity Exchange of India as the dollar strengthened against a basket of major currencies on expectations of continued aggressive rate hikes by the US Federal Reserve.
* US non-farm payroll data and unemployment data pointed to a resilient US economy, which raised market expectations of the Fed continuing its hawkish stance and raise interest rates aggressively in its November policy meeting.
* According to the US Department of Labor, non-farm payrolls rose by 263,000 in September. Analysts had expected an increase of 250,000. The unemployment rate slid to 3.5% in September, from 3.7% in the previous month.
* “Gold prices edged lower after a solid non-farm payroll report kept aggressive tightening by the Fed on the table,” said Edward Moya, senior analyst at OANDA.
* According to the CME FedWatch tool, 79.6% of the market participants expect the Fed to raise interest rates by 75 basis points in November. This remains supportive of elevated US bond yields and further contributes to driving flows away from the non-yielding precious metal.
* GOLD holdings with SPDR Gold Trust fell 2.03 tn to 944.31 tn on Friday, according to data on the website of the world’s largest gold exchange-traded fund.
* Investors and market participants are waiting for minutes of the Fed’s September meeting and inflation data to gauge the magnitude of future rate hike.
* “Investors will look for fresh clues about the Fed’s future rate hike path, which, in turn, will play a key role in influencing the dollar and provide a fresh directional impetus to gold,” said fxstreet.com in a report.
* At 1640 IST, the most-active contracts of bullion were:
–December gold was down 1.3% at 51,275 rupees per 10 gm on MCX
–December gold was down 1.3% at $1,686.9 an ounce on COMEX
–December SILVER was down 2% at 59,575 rupees per kg on MCX
–-December silver was down 2% at $19.84 an ounce on COMEX
* Outlook for the evening session:
–MCX gold seen at 51,210-52,170 rupees per 10 gm
–COMEX gold seen at $1,680-$1,714 an ounce
–MCX silver seen at 59,400-61,710 rupees per kg
–COMEX silver seen at $19.52-$20.74 an ounce
US$1 = 82.32 rupees
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Manisha Baxla
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