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Wednesday, December 6, 2023

India Bullion: Gold steady on risk aversion; firm dollar caps gains

Informist, Monday, Sep 25, 2023


By Sandeep Sinha


MUMBAI – Futures contracts of gold were steady today on the Multi Commodity Exchange of India and COMEX because of risk aversion and sell-off in riskier assets. However, the upside was capped by a firm dollar and a rally in 10-year Treasury yields on the prospect of further rate hikes by the US Federal Reserve and outflow in gold exchange-traded funds.


On the COMEX, money managers increased their long positions in GOLD contracts by 16,843 lots to 66,639 contracts as of Sep 19, according to Commodity Futures Trading Commission data.


The dollar index, which measures the strength of the greenback against a basket of major currencies, was up 0.2% at 105.75, the highest in six months. A firm greenback makes precious commodities priced in the greenback unattractive for buyers of other currencies.


On Friday, gold holdings with SPDR Gold Trust, the world’s largest gold-backed ETF, fell by 1.44 tn to 877.39 tn. The fund has a market value of $54.36 bln.


Investors will take fresh cues from US GDP and core personal consumption expenditure data later in the week.


The spot gold-silver ratio, also known as the mint ratio, was higher at 82.09, indicating that gold had outperformed silver. The ratio measures the ounces of silver required to buy an ounce of gold.


SILVER traded lower tracking weak cues from industrial metals. “There could be bouts of correction in silver, but these dips could be used as a buying opportunity,” Motilal Oswal said in a note.


At 1915 IST, MCX Bulldex, an index tracking the real-time performance of gold and silver futures on the MCX, was down 30 points, or 0.2%, at 15796 points.


The October and December gold contracts recorded turnovers of 20.20 bln rupees and 7.93 bln rupees, respectively. At 1915 IST, the September and December silver contracts saw turnovers of 20.11 bln rupees and 606.98 mln rupees, respectively.


Traders built fresh long positions in the most-active December gold futures by 939 lots to 11,090 lots. Market players increased their bearish positions in the MCX December silver contract by 500 lots.


The average traded price of the October gold contract on the domestic exchange was 59,375.93 rupees per 10 gm.


On the technical charts, the MCX October gold contract traded lower than the five-, 20-, 50- and 100-day simple moving averages, but lower than the 200-day simple moving average. The momentum oscillator, Relative Strength Index, was at 48.16, indicating sideways movement in price.


At 1925 IST, following were the most-active contracts of bullion:

 -October gold at 58,921 rupees per 10 gm on MCX

 -December gold at $1,944.0 an ounce on COMEX

 -December silver was down 0.3% at 73,084 rupees per kg on MCX

 –December silver was down 0.5% at $23.71 an ounce on COMEX


Outlook for the rest of the session:

 -MCX gold seen at 58,550–59,220 rupees per 10 gm

 -COMEX gold seen at $1,935.0–$1,955.0 an ounce

 -MCX silver seen at 72,000-74,000 rupees per kg

 -COMEX silver seen at $23.50-$24.85 an ounce



US$1 = 83.15 rupees

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


Edited by Ashish Shirke


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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Source: Cogencis

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