Informist, Friday, Dec 16, 2022
By Chinmay Mungse
MUMBAI – GOLD contracts on the Multi Commodity Exchange of India and COMEX were trading marginally higher on safe-haven demand on increased geopolitical tensions and due to a weak dollar.
* Russia launched a massive missile attack on energy facilities and infrastructure in Ukraine’s capital Kyiv today, which raised the prospect of increased tension with the western countries and boosted bullion appeal.
* The dollar index, which tracks the greenback against a basket of six other currencies, also fell 0.1% to 104.123, supporting the yellow metal prices.
* A sell-off in asset classes and increased risk aversion due to mounting recession fears are also supporting bullion prices.
* However, investors and market participants expect the rise in gold prices to be short-lived as mounting fears of a recession are expected to boost the safe-haven demand for the greenback.
Despite recession fears, interest rates are expected to rise further and therefore gold prices can witness buying on decline, an analyst said.
* The European Central Bank and the Bank of England also raised interest rates by 50 basis points on Thursday in order to tame the rising inflation. Both central banks maintained a hawkish stance and said that further rate hikes will be needed to cool inflation.
* At 1840 IST, the most-active contracts of bullion were:
–February gold was up 0.3% at 54,242 rupees per 10 gm on MCX
–February gold was up 0.4% at $1,794.8 an ounce on COMEX
–March silver was down 0.7% at 67,360 rupees per kg on MCX
–-March silver was down 0.6% at $23.17 an ounce on COMEX
* Outlook for the evening session:
–MCX gold seen at 53,910–54,250 rupees per 10 gm
–COMEX gold seen at $1,775–$1,810 an ounce
–MCX silver seen at 66,133-68,200 rupees per kg
–COMEX silver seen at $22.55-$23.50 an ounce
End
US$1 = 82.87 rupees
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Maheswaran Parameswaran
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