Informist, Thursday, Mar 3, 2022
By Chinmay Mungse
MUMBAI – GOLD and SILVER contracts on the Multi Commodity Exchange of India and COMEX surged today as tensions between Ukraine and Russia escalated, boosting safe-haven demand for the precious metals.
* Ukraine’s second-biggest city, Kharkiv, suffered heavy bombardment on Wednesday as Russia’s week-long invasion continued to escalate.
* Responding to Ukraine’s request of stopping the bombing before Russia-Ukraine talks, Russian foreign minister Sergey Lavrov said that Moscow was ready for talks to end the fighting in Ukraine, but would continue with its efforts to destroy Ukraine’s military infrastructure.
* “Russia-Ukraine crisis has refuelled stagflation concerns worldwide, reviving gold’s demand as a safe haven,” said Ajay Kedia, research head at Kedia Comtrade.
* US Federal Reserve Chair Jerome Powell on Wednesday said there was increasing uncertainty about the economic outlook due to the Russia-Ukraine conflict.
* With the Fed’s March meeting round the corner, Powell signalled a patient approach to hiking interest rates in the US, which also supported gold prices further. Powell said he was inclined to support a 25-basis-point rate hike in March, quelling some concern about the potential for a more aggressive rate hike.
* Investors are currently awaiting Powell’s testimony before the US Congress today, to get a clear idea of the Fed’s rate hike plan.
* Capping the upside to gold prices in the international market, Automatic Data Processing Inc’s non-farm payroll data for February showed an increase of 475,000 jobs in the US private sector.
* “A decent labour market data and a rise in the US treasury bond yields on Wednesday weighed in on gold prices in the international markets,” said Commerzbank AG.
* At 1740 IST, most active contracts of bullion were:
–April gold was up 1% at 51,820 rupees per 10 gm on MCX
–April gold was up 0.7% at $1,936 an ounce on COMEX
–May silver was up 1.2% at 68,461 rupees per kg on MCX
–-May silver was up 1% at $25.42 an ounce on COMEX
* Outlook for the evening session:
–MCX gold seen at 51,200-52,350 rupees
–COMEX gold seen at $1,916-$1,944
–MCX silver seen at 66,650-69,200 rupees
–COMEX silver seen at $24.60-$26.20
End
US$1 = 75.91 rupees
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Avishek Dutta
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