Informist, Thursday, Jan 6, 2022
By Chinmay Mungse
MUMBAI – GOLD contracts on the Multi Commodity Exchange of India and COMEX were in the red today after minutes of the US Federal Reserve’s December meeting indicated the central bank’s hawkish tone with its members favouring a faster-than-expected interest rate hike to curb the rising inflation.
* SILVER contracts on MCX were lower, tracking losses in the COMEX contracts.
* The minutes, released on Wednesday, revealed that US Fed may increase interest rates as early as March. “The minutes were interpreted as hawkish, signalling the possibility to implement earlier and faster rate hikes thanks to the strengthening US economy and the high inflation,” said Commerzbank AG.
* The yield on 10-year US Treasury note rose to a nine-month high of 1.73% on the Fed’s aggressive stance. This dragged gold prices down.
* The US labour market also recovered as 807,000 jobs were created in December, showed data released by Automatic Data Processing Inc. A robust employment data, considered a sign of a growing economy, dented the appeal for bullion as a safe-haven asset.
* “Positive employment numbers increase the chances of the Fed increasing interest rates sooner,” said Ajay Kedia, research head at Kedia Comtrade.
* At 1641 IST, the most-active contracts of bullion were:
–February gold was down 0.8% at 47,662 rupees per 10 gm on MCX
–February gold was down 1.2% at $1,805.1 an ounce on COMEX
–March silver was down 2.4% at 60,742 rupees per kg on MCX
–-March silver was down 3.5% at $22.4 an ounce on COMEX
* Outlook for the evening session:
–MCX gold seen at 47,500-47,950 rupees
–COMEX gold seen at $1,800-$1,834
–MCX silver seen at 60,300-61,600 rupees
–COMEX silver seen at $22.55-$23.40
End
US$1 = 74.49 rupees
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Tanima Banerjee
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