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India Bullion: Gold rises on short covering after multi-month low

Informist, Friday, Jul 22, 2022

 

By Chinmay Mungse

 

MUMBAI – GOLD contracts on the Multi Commodity Exchange of India and COMEX were trading higher today as investors covered their short positions after the yellow metal contracts hit multi-month lows on the exchanges.  

 

* Gold contracts on COMEX hit a 16-month low of $1,678.40 per ounce, while the same month contract on MCX hit a two-month low of 49,703 rupees per 10 gm on Thursday due to increased expectations of an aggressive monetary policy tightening by major global central banks. 

 

* "The gold market witnessed short covering and bargain buying post the sharp fall on Thursday," said Veeresh Hiremath, director at Finlit Consulting. 

 

* A fall in the yields on US treasury bonds also supported gold prices in the international markets. 

 

* However, the European Central Bank's decision to raise interest rates by 50 basis points is expected to cap the upside to gold prices in the later trading sessions, said analysts.

 

* The US Federal Reserve is also expected to further raise interest rates by 75 basis points in its upcoming meeting on Jul 26-27.

 

* At 1642 IST, the most active contracts of bullion were:
   –June gold was up 0.4% at 50,569 rupees per 10 gm on MCX
   –June gold was up 0.5% at $1,721.6 an ounce on COMEX
   –September SILVER was down 0.1% at 55,343 rupees per kg on MCX
   –-September silver was down 0.1% at $18.695 an ounce on COMEX

 

* Outlook for the evening session:
   –MCX gold seen at 50,300-50,700 rupees
   –COMEX gold seen at $1,710-$1,730
   –MCX silver seen at 55,000-55,800 rupees
   –COMEX silver seen at $18.50-$19.00.

 

End

 

US$1 = 79.85 rupees

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

 

Edited by Michael Correya

 

 

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