India Bullion: Gold dn tailing COMEX as stronger US dlr dulls demand

Informist, Wednesday, Apr 27, 2022

By Chinmay Mungse

MUMBAI – GOLD contracts on the Multi Commodity Exchange of India and COMEX were trading lower today as a stronger dollar against a basket of major currencies dulled the demand for the precious metal.

* The prospects of the US Federal Reserve raising interest rates in its May meeting have propelled the US dollar index to 102.77, its highest level since March 2020.

* The US Fed is expected to raise interest rates by at least 50 basis points to combat high inflation in the country. This is likely to depress demand for gold, as liquidity in the market will reduce.

* The aggressive rate hike prospects from the US Fed and lesser demand for gold in China due to the lockdown imposed in several cities to curb the rising COVID-19 cases has pressured bullion prices, said Manoj Jain, research head at Prithvi Finmart.

* However, the downside was capped today as the safe-haven appeal of the precious metal remained intact, fanned by the ongoing war between Russia and Ukraine and the fears of stalling global economic growth and soaring inflation.

* “Investors sought cover from fears of stalling global economic growth and soaring inflation,” said Sriram Iyer, senior analyst at Reliance Securities.

* SILVER contracts on the MCX were trading higher tracking gains in the benchmark COMEX contracts.

* At 1645 IST, the most-active contracts of bullion were:
   –June gold was down 0.3% at 51,422 rupees per 10 gm on MCX
   –June gold was down 0.3% at $1,897.9 an ounce on COMEX
   –May silver was up 0.2% at 65,103 rupees per kg on MCX
   –-May silver was up 0.6% at $23.67 an ounce on COMEX

* Outlook for the evening session:
–MCX gold seen at 51,406-51,765 rupees
–COMEX gold seen at $1,888-$1,912
–MCX silver seen at 64,654-65,484 rupees
–COMEX silver seen at $23.33-$23.86.

End

US$1 = 76.53 rupees

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

Edited by Pranav S. Joshi

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Source: Cogencis