Informist, Tuesday, May 31, 2022
By Chinmay Mungse
MUMBAI – GOLD and SILVER contracts on the Multi Commodity Exchange of India and COMEX were trading in the red today weighed down by a stronger dollar and higher yields on US treasury bills.
* US Federal Reserve Governor Christopher Waller on Monday said the central bank might raise interest rates by 50 basis points until inflation in the country eased to 2%, which also dented the appeal for bullion.
* Meanwhile, inflation in the Eurozone surged to 8.1% in May, which heightened the market expectations of an interest rate hike by the European Central Bank in its policy meeting in the next week.
* “Such a high inflation rate could reignite the debate about whether the ECB should perhaps increase interest rates more quickly or sharply,” said Commerzbank AG. “Calls for a 50 basis point hike at the meeting in July could become louder, in which case gold might come under pressure.”
* However, the demand for precious metals as an inflation hedge remained intact as the rising oil prices heightened inflation concerns.
* Traders and investors are now waiting for the US non-farm payroll data to be released later this week for fresh triggers for bullion prices.
* At 1752 IST, the most-active contracts of bullion were:
–August gold was down 0.2% at 50,984 rupees per 10 gm on MCX
–August gold was down 0.3% at $1,852.1 an ounce on COMEX
–July silver was down 1.1% at 61,187 rupees per kg on MCX
–-July silver was down 1.7% at $21.72 an ounce on COMEX
* Outlook for the evening session:
–MCX gold seen at 50,800-51,200 rupees,
–COMEX gold seen at $1,840-$1,870
–MCX silver seen at 61,180-62,400 rupees
–COMEX silver seen at $21.63-$22.40
End
US$1 = 77.64 rupees
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Sushmita Mukherjee
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Source: Cogencis