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India Bullion: MCX gold down on rupee appreciation; COMEX steady

Informist, Wednesday, Sep 20, 2023

 

By Sandeep Sinha

 

MUMBAI – Futures contracts of gold fell marginally on the Multi Commodity Exchange of India despite steady cues from COMEX today because of an appreciation in the rupee against the dollar, which makes precious metals priced in dollars cheaper for domestic buyers.

 

The rupee closed 0.2% higher against the dollar as banks sold the greenback on behalf of the Reserve Bank of India.

 

"The gold price is expected to trade in this range for the day as traders turned cautious and trimmed their positions before the Federal Reserve policy outcome. Investors keep their focus on the Fed's updated economic projection since this information will be crucial in determining if another rate hike is still on the table or not," said Saumil Gandhi, senior analyst – commodities, HDFC Securities.

 

"Recent strength in US economic activity and upside risks to the inflation outlook amid rising energy prices might warrant higher rates for longer and might be near-term headwind for gold prices," said Ravindra Rao, vice president and head of commodity research at Kotak Securities Ltd.

 

On Tuesday, gold holdings with the SPDR Gold Trust, the world's largest gold-backed ETF, remained steady at 878.83 tn. The fund has a market value of $54.66 bln.

 

The spot gold-silver ratio, also known as the mint ratio, was lower at 82.97, indicating that silver had outperformed gold. The ratio measures the ounces of silver required to buy an ounce of gold.

 

SILVER prices traded higher, taking cues from industrial metals and a weaker dollar.

 

At 1850 IST, MCX Bulldex, an index tracking the real-time performance of gold and silver futures on the MCX, was down 24 points, or 0.2%, at 15800 points.

 

The October and December gold contracts recorded turnovers of 14.75 bln rupees and 6.03 bln rupees, respectively. At 1850 IST, the September and December silver contracts saw turnovers of 14.14 bln rupees and 405.87 mln rupees, respectively.

 

Traders reduced their long positions in the most-active October gold futures by 759 lots to 8,250 lots. Market players raised their bullish positions in the MCX December silver contract by 170 lots.

 

The average traded price for the October gold contract on the domestic exchange was 59,194.34 rupees per 10 gm.

 

On the technical charts, the MCX October gold contract traded higher than the five-, 20-, 50- and 200-day simple moving averages, but lower than the 100-day simple moving average. The momentum oscillator, Relative Strength Index, was at 54.58, suggesting a positive bias in price.

 

At 1850 IST, following were the most-active contracts of bullion:

 -October gold was down 0.2% at 59,179 rupees per 10 gm on MCX

 -December gold was flat at $1,953.45 an ounce on COMEX

 -December silver was up 0.1% at 72,610 rupees per kg on MCX

 –December silver was up 0.2% at $23.52 an ounce on COMEX

 

Outlook for the rest of the session:

 -MCX gold seen at 58,860–59,550 rupees per 10 gm

 -COMEX gold seen at $1,945.0–$1,965.0 an ounce

 -MCX silver seen at 71,800-73,300 rupees per kg

 -COMEX silver seen at $23.40-$23.65 an ounce

 

End

 

US$1 = 83.07 rupees

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

 

Edited by Vidhi Verma

 

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