India Bullion: MCX, COMEX gold at multi-mo high on weak US dollar

Informist, Monday, Jan 9, 2023

By Chinmay Mungse

MUMBAI – GOLD contracts on the Multi Commodity Exchange of India and COMEX hit a multi-month high today as cooling jobs market data from the US heightened market expectations of a slowdown in the rate hike pace from US Federal Reserve.

* According to the Labour Department data released on Friday, non-farm payrolls in the US slowed to a two-year low of 223,000, but were still above market estimates of 200,000.

* Expectations of a softer rate hike from the US Federal Reserve after disappointing economic data weighed on the dollar and supported the yellow metal. According to the CME FedWatch tool, analysts expect the central bank to raise interest rates by 25 basis points in its February meeting.

* The most-active February gold contract on the MCX rose to 56,175 rupees per 10 gm, the highest level since August 2020. The same-month contract on the COMEX hit a seven-month high of $1,885.4 per ounce.

* “The US dollar adds to Friday’s heavy losses inspired by softer macro-data, which lifted bets for a less-aggressive policy tightening by the Fed,” fxstreet.com said in a report. “This, in turn, is seen as a key factor benefitting the US dollar-denominated gold price.”

* Investors and market participants will watch out for the US Fed Chair Jerome Powell’s speech on Tuesday. “There may be a soft signal from the Fed Chair on the rate hikes after moderate US job reports,” said Manoj Jain, research head at Prithvi Finmart. “His report could be positive for precious metals.”

* At 1658 IST, the most-active contracts of bullion were:

–February gold was up 0.5% at 56,019 rupees per 10 gm on MCX

–February gold was up 0.4% at $1,876.6 an ounce on COMEX

–March silver was up 0.5% at 69,468 rupees per kg on MCX

–-March silver was up 0.2% at $24.02 an ounce on COMEX

* Outlook for the evening session:

–MCX gold seen at 55,920–56,250 rupees per 10 gm

–COMEX gold seen at $1,874–$1,882 an ounce

–MCX silver seen at 69,100-70,350 rupees per kg

–COMEX silver seen at $23.74-$24.30 an ounce

End

US$1 = 82.36 rupees

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

Edited by Vidhi Verma

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