Informist, Monday, Feb 14, 2022
By Chinmay Mungse
MUMBAI – GOLD and SILVER contracts on the Multi Commodity Exchange of India and COMEX were trading higher today, as escalating geopolitical tensions and higher global inflation boosted demand for the precious metals.
* Consumer price index data on Thursday showed inflation in the US was at 7.5% on year through January, the steepest rise in 40 years. Analysts had expected inflation to rise to around 7.2%.
* “Higher inflation might prompt the US Federal Reserve to hike the interest rates more steeply, but the market has consolidated the hike. Therefore, inflation hedge demand for gold remains intact,” said Ajay Kedia, research head at Kedia Capital.
* The ongoing geopolitical concerns related to Ukraine and Russia have escalated. According to reports, the Australian embassy in Kyiv was evacuated due to fears of a Russian invasion.
* “The upswing (in gold prices) is attributable to a warning from US intelligence services that a Russian invasion of Ukraine is imminent. Consequently, gold was in considerable demand as a safe haven,” said Commerzbank AG.
* However, a stronger US dollar against a basket of major currencies exerted pressure on bullion prices, capping the rise.
* Investors are eyeing the US producers price index data on Tuesday. Analysts expect the data to be weaker, further supporting gold prices.
* At 1828 IST, the most-active contracts of bullion were:
–April gold was up 1% at 49,590 rupees per 10 gm on MCX
–April gold was up 0.7% at $1,854.8 an ounce on COMEX
–March silver was up 1.6% at 64,000 rupees per kg on MCX
–-March silver was up 1.5% at $23.74 an ounce on COMEX
* Outlook for the evening session:
–MCX gold seen at 49,100-49,900 rupees
–COMEX gold seen at $1,830-$1,875
–MCX silver seen at 62,800-64,200 rupees
–COMEX silver seen at $22.55-$23.77
End
US$1 = 75.61 rupees
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Avishek Dutta
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