Informist, Wednesday, Oct 18, 2023
By Sandeep Sinha
MUMBAI – Futures contracts of gold rose today on the Multi Commodity Exchange of India and the COMEX as concerns of the conflict between Israel and Palestine militant group Hamas escalating across West Asia increased safe-haven appeal of the precious metal.
On Tuesday, Israel is alleged to have bombed a hospital in Gaza, killing more than 500 Palestinians. This led to mass protests across West Asia and leaders of Jordan, Egypt and Palestinian Authority cancelling a summit with US President Joe Biden.
On the domestic exchange, GOLD prices today rose to the highest level since Jul 20. The metal has gained 6.2% from the low of Oct 4 because of safe-haven and festival demand.
“COMEX gold surged to its highest level in four weeks as demand for haven assets intensified after the Middle East turmoil widened, with hopes for a diplomatic resolution deteriorating after a deadly explosion in Gaza,” said Saumil Gandhi, senior analyst – commodities, HDFC Securities, in a note.
Gold, which has risen by more than 5.5% since the unexpected attack by Hamas on Israel, is still supported by the possibility of further escalation, Gandhi said.
However, the upside was restricted by a firm dollar and continued outflow from gold exchange-traded funds.
The dollar index, which measures the strength of the greenback against a basket of six major currencies, was up 0.1% at 106.27. A firm greenback makes commodities priced in the dollar expensive for holders of other currencies.
On Tuesday, gold holdings with SPDR Gold Trust, the world’s largest gold-backed ETF, remained steady at 855.45 tn, but the volume was lowest since August 2019. The fund has a market value of $53.02 bln.
Investors will take further cues from the speeches of Federal Open Market Committee members John Williams, Christopher Waller, and Michelle Bowman later today. They are also waiting for Federal Reserve Chair Jerome Powell’s speech on Thursday.
The spot gold-silver ratio, also known as the mint ratio, was lower at 83.09, indicating that SILVER had outperformed gold. The ratio measures the ounces of silver required to buy an ounce of gold.
Silver prices rose, taking cues from gold and industrial metals. Expectation of higher industrial demand also supported the positive sentiment for the white metal.
At 1725 IST, MCX Bulldex, an index tracking the real-time performance of gold and silver futures on the MCX, was up 148 points, or 1%, at 15800 points.
The December and February gold contracts recorded turnovers of 21.95 bln rupees and 1.21 bln rupees, respectively. At 1725 IST, the December and March silver contracts saw turnovers of 20.50 bln rupees and 1.26 bln rupees, respectively.
The average traded price of the December gold contract on the domestic exchange was 59,704.21 rupees per 10 gm.
On the technical charts, the MCX December gold contract traded higher than the five-, 20-, 50-, 100-, and 200-day simple and exponential moving averages. The momentum oscillator, Relative Strength Index, was at 66.21, suggesting further upside in the price.
At 1725 IST, the following were the most active contracts of bullion:
-December gold was up 1% at 59,835 rupees per 10 gm on MCX
-December gold was up 1.2% at $1,958.85 an ounce on COMEX
-December silver was up 1.3% at 72,465 rupees per kg on MCX
–December silver was up 1.5% at $23.36 an ounce on COMEX
Outlook for the rest of the session:
-MCX gold seen at 59,550–60,000 rupees per 10 gm
-COMEX gold seen at $1,950.0–$1,970.0 an ounce
-MCX silver seen at 71,500-73,500 rupees per kg
-COMEX silver seen at $23.20-$23.50 an ounce
End
US$1 = 83.26 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.
Informist Media Tel +91 (22) 6985-4000
Send comments to [email protected]
© Informist Media Pvt. Ltd. 2023. All rights reserved.
Source: Cogencis
