India Bullion: Down tailing COMEX as investors await US payroll data

Informist, Friday, Apr 1, 2022


By Chinmay Mungse


MUMBAI – GOLD and SILVER contracts were trading lower today on the Multi Commodity Exchange and COMEX, despite higher inflation in the US and Eurozone, as expectation of an increase in the US labour markets kept the bullion prices under pressure, said analysts. The official US non-farm payroll data is scheduled for release later today.


* "Higher inflation has been priced in, investors will be now focusing on the official US non-farm payroll data which will set the tone for the future rate hikes by the US Federal Reserve," said Veeresh Hiremath, director at Finlit Consulting.


* The personal consumption expenditure index on Thursday showed that US inflation grew at 6.4% for the year through February, the highest in four decades. However, analysts believe that the markets have already factored in the higher inflation.


* "If the non-farm payroll data shows a growth in the US labour market, it will be confirmed that the US Federal Reserve will hike interest rates by 50 basis points in May," said Sriram Iyer, senior analyst at Reliance Securities. "Therefore, the market is in a bit of a correction mode currently."

* Meanwhile, inflation in the Eurozone soared to 7.5% on year through March, much above the analyst expectations of a 6.7% rise. "The higher inflation will further increase the pressure on the European Central Bank to take steps to ensure price stability," said Commerzbank AG.


* Further, strength in the US dollar index against a basket of major currencies also dented the demand for the precious metal.


* However, analysts expect the physical demand for the precious metal to pick up on account of the upcoming festive season in various parts of India. "Festive demand during upcoming new years in various parts such as Gudipadwa, Ugadi and others in April, should drive the market sentiment up," said Somasundaram P.R., Regional CEO, India at World Gold Council.

* At 1632 IST, the most-active contracts of bullion were:
   –June gold was down 0.7% at 51,829 rupees per 10 gm on MCX
   –June gold was down 1% at $1,934.2 an ounce on COMEX
   –May silver was down 0.6% at 67,056 rupees per kg on MCX
   –-May silver was down 0.9% at $24.9 an ounce on COMEX


* Outlook for the evening session:
   –MCX gold seen at 51,700-52,100 rupees
   –COMEX gold seen at $1,915-$1,945
   –MCX silver seen at 67,200-68,300 rupees
   –COMEX silver seen at $24.74-$25.64.





US$1 = 75.79 rupees

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT


Edited by Tanima Banerjee



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