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India Bullion: Down tracking COMEX as firm US bond ylds dull demand

Informist, Friday, Oct 21, 2022


By Chinmay Mungse


MUMBAI – GOLD and SILVER contracts on the Multi Commodity Exchange of India and COMEX fell today, owing to a rise in US treasury yields, which dulled demand for the precious metals. 


* Philadelphia US Federal Reserve President Patrick Harker said that given the current inflation situation, the Fed was actively trying to slow the economy. “We are going to keep raising rates for a while.”


* Hawkish comments by the Fed official drove yields on the benchmark 10-year US Treasury bonds to a 14-year high of over 4.28%, which dulled demand for the non-interest yielding bullion. 


* “The rise in the treasury bond yields is expected to keep gold prices in the international and domestic market under pressure for the next few sessions,” said Sriram Iyer, senior analyst at Reliance Securities. 


* Further, data from the US Labor Department showed that initial unemployment claims in the US fell by 12,000 to a three-week low of 214,000 in the week ended Oct 15, much below analysts’ expectation of 230,000 claims. 


* Expectations of an aggressive rate hike by the US Fed strengthened as the number of Americans filing new claims for unemployment benefits fell unexpectedly last week, said Navneet Damani, senior vice-president of commodity research at Motilal Oswal Financial Services.


* However, firm demand in the Indian spot gold market and a stronger rupee against the US dollar capped losses on the domestic bourse. A stronger rupee makes the greenback-denominated commodity more expensive for Indian investors. 


* According to jewellers, the demand for gold in the Indian market is expected to rise 25-30% on year in the festival season. 


* At 1725 IST, the most-active contracts of bullion were:
   –December gold was down 0.3% at 49,970 rupees per 10 gm on MCX
   –December gold was down 0.6% at $1,627.7 an ounce on COMEX
   –December silver was down 1.6% at 55,750 rupees per kg on MCX
   –-December silver was down 2% at $18.30 an ounce on COMEX


* Outlook for the evening session:

   –MCX gold seen at 49,400–50,300 rupees per 10 gm
   –COMEX gold seen at $1,620-$1,650 an ounce
   –MCX silver seen at 56,150-57,750 rupees per kg
   –COMEX silver seen at $18.00-$19.00 an ounce




US$1 = 82.68 rupees

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


Edited by Avishek Dutta


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Source: Cogencis

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