Informist, Friday, May 20, 2022
By Chinmay Mungse
MUMBAI – GOLD and SILVER contracts on the Multi Commodity Exchange of India rose today, tracking overnight gains in benchmark contracts on COMEX.
* Benchmark GOLD contracts on COMEX were flat today as positive cues from higher safe-haven demand were offset by fears of an aggressive stance by global central banks to tackle rising inflation.
* Safe-haven demand for the precious metal witnessed a jump after the number of Americans filing for jobless claims surged to 218,000 last week against expected claims of 200,000.
* “Downbeat US economic data and an increase in unemployment claims pushed the dollar index lower, which supported gold prices,” said Manoj Jain, research head at Prithvi Finmart.
* The US dollar index slipped to an almost two-week low of 102.65 on Monday, lending support to bullion prices.
* Fears of slower global economic growth and sluggish global equity markets also boosted the safe-haven appeal of the precious metals. “The markets remain worried that a more aggressive move by major central banks to constrain inflation could pose challenges to global economic growth,” said fxstreet.com in a report.
* However, fears of aggressive interest rate hikes from major central banks kept traders and investors cautious, capping the gains.
* “Gold’s reputation as an inflation hedge is being countered by an aggressive policy stance taken by central banks to fight soaring prices. US Federal Reserve Chair Powell recently stated that the central bank was intent on using its tools to bring down multi-decade high inflation,” said Ajay Kedia, research head at Kedia Comtrade.
* At 1725 IST, the most-active contracts of bullion were:
–June gold was up 0.3% at 50,685 rupees per 10 gm on MCX
–June gold was flat at $1,841.3 an ounce on COMEX
–July silver was up 0.4% at 61,785 rupees per kg on MCX
–-July silver was up 0.2% at $21.96 an ounce on COMEX
* Outlook for the evening session:
–MCX gold seen at 50,280-51,150 rupees
–COMEX gold seen at $1,836-$1,858
–MCX silver seen at 61,030-62,900 rupees
–COMEX silver seen at $21.79-$22.42.
End
US$1 = 77.55 rupees
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
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