Informist, Thursday, Mar 23, 2023
By Sandeep Sinha
MUMBAI – Gold and silver contracts extended gains on the Multi Commodity Exchange of India and the COMEX today as the dollar and 10-year Treasury yield fell overnight on moderation in the US Federal Reserve’s tone.
The US Federal Open Market Committee on Wednesday raised key interest rates by 25 basis points to 4.75-5.00%, even as Fed Chairman Jerome Powell hinted that it is near the end of its rate-hike cycle. This led to a sharp rally in precious metals globally on Wednesday.
“Gold prices continue to trade higher after the US Federal Reserve raised interest rates by an expected 25 bps and signalled it was on the verge of pausing future hikes in view of the recent turmoil in the financial sector,” said Manav Modi, analyst at Motilal Oswal Financial Services.
The Fed also increased inflation forecast and lowered the growth expectations for this year. Going forward, comments from Fed officials will be very important to keep an eye on, also after higher inflation data on Wednesday, Modi said.
“We expect the positive trend in precious metals will continue and COMEX gold prices could retest $1,995 per ounce level in short term,” said Saumil Gandhi, senior analyst – commodities at HDFC Securities.
Russia’s central bank said its bullion holdings jumped up by 1 mln ounces over the past year as it bought gold in the face of Western sanctions, according to Bloomberg report.
The spot gold-silver ratio, also known as Mint Ratio, was down at 86.51 to 1, which indicates that silver has outperformed gold. The ratio measures the number of silver ounces required to buy an ounce of gold.
Gold holdings with SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, remained steady at 923.11 tn on Wednesday. The gold exchange-traded fund has a market value of $57.84 bln.
MCX Bulldex, an index tracking the real-time performance of gold and silver futures on the MCX, was up 114 points, or 0.7% at 16808 as of 1745 IST.
As at 1745 IST, the April and June gold contracts recorded turnovers of 23.86 bln rupees and 8.40 bln rupees, respectively. At the same time, the May and July silver contracts saw a turnover of 12.95 bln rupees and 833.39 mln, respectively.
* At 1745 IST, the most-active contracts of bullion were:
–April gold was up 0.9% at 59,264 rupees per 10 gm on MCX
–April gold was up 1.6% at $1,981.05 an ounce on COMEX
–May silver was up 0.6% at 69,743 rupees per kg on MCX
–-May silver was up 1.3% at $23.08 an ounce on COMEX
* Outlook for the rest of the session:
–MCX gold seen at 58,790–59,750 rupees per 10 gm
–COMEX gold seen at $1,940–$2,010 an ounce
–MCX silver seen at 68,600-70,700 rupees per kg
–COMEX silver seen at $22.54-$23.30 an ounce
US$1 = 82.26 rupees
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Ashish Shirke
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