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India Bullion: Gold prices down on firm dlr, weak safe-haven appeal

Informist, Tuesday, Sep 5, 2023

 

By Sandeep Sinha

 

MUMBAI – Futures contracts of GOLD fell on the Multi Commodity Exchange of India and the COMEX today as the dollar strengthened following hawkish comments by the US Federal Reserve member and weak safe-haven demand.

 

The dollar index, which measures the strength in the greenback against a basket of six major currencies, was up 0.3% at 104.56 after US Federal Reserve Governor Christopher Waller told CNBC today that one more interest rate hike would not send the economy into a recession or hurt the job market. A firm greenback makes precious metals priced in dollars expensive for those holding other currencies.

 

The expectation of higher interest rates reduces appeal of non-yielding assets such as gold.

 

“Gold prices corrected amid rising US Treasury yields after resuming trading on Tuesday following a US public holiday, with markets also focusing on divided views for the rate outlook in Europe,” said Saumil Gandhi, senior analyst – commodities at HDFC Securities.

 

“The demand from the investment front remains subdued as exchange-traded funds cut 24,610 troy ounces of gold from their holdings in the last trading session,” he said.

 

Gold holdings with SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, remained steady at 890.97 tn. The fund has a market value of $55.57 bln.

 

The spot gold-silver ratio, also known as the mint ratio, was higher at 81.34, indicating that gold had outperformed silver. The ratio measures the ounces of silver required to buy an ounce of gold.

 

SILVER prices traded lower because of weak economic data from China and muted cues in gold.

 

At 1905 IST, MCX Bulldex, an index tracking the real-time performance of gold and silver futures on the MCX, was down 68 points, or 0.4%, at 15902.

 

The October and December gold contracts recorded turnovers of 12.03 bln rupees and 2.03 bln rupees, respectively. At 1905 IST, the September and December silver contracts saw turnovers of 31.0 bln rupees and 1.06 bln rupees, respectively.

 

Traders trimmed their long positions by 50 lots to open interest of 12,006 lots on the most-active October gold futures. They also reduced long positions on December silver contract by 212 lots to 13,966 lots on the domestic exchange.

 

The average traded price for the October gold contract on the domestic exchange was 59,354.80 rupees per 10 gm.

 

On the technical charts, the MCX October gold contract traded higher than the 20-, 50- and 200-day simple moving averages but was lower than the five-, and 100-day simple moving averages on the daily chart. The momentum oscillator, Relative Strength Index, was at 55.65, indicating a positive trend in the price.

 

At 1905 IST, following were the most active contracts of bullion:

 -October gold was down 0.1% at 59,319 rupees per 10 gm on MCX

 -December gold was down 0.4% at $1,958.55 an ounce on COMEX

 -December silver was down 0.5% at 72,700 rupees per kg on MCX

 –December silver was down 1.5% at $24.18 an ounce on COMEX

 

Outlook for the rest of the session:

 -MCX gold seen at 59,050–59,680 rupees per 10 gm

 -COMEX gold seen at $1,950.0–$1,970.0 an ounce

 -MCX silver seen at 72,500-73,200 rupees per kg

 -COMEX silver seen at $24.0-$24.40 an ounce

 

End

US$1 = 83.04 rupees

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

 

Edited by Manisha Baxla

 

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. 2023. All rights reserved.

Source: Cogencis

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