India Bullion: Rises on weak dlr, US bond ylds after Powell’s speech

Informist, Thursday, Dec 1, 2022


By Chinmay Mungse


MUMBAI – GOLD and SILVER contracts on the Multi Commodity Exchange of India and COMEX rose today as the dollar index and yields on the US treasury bonds slipped, boosting demand for precious metals. 


* US Federal Reserve Chair Jerome Powell said the central bank will slow down the pace of interest rate hikes from December, which weighed on the greenback and reaffirmed market expectations of a softer rate hike from the Fed.

Speaking at the Brookings Institution in Washington, Powell said, "it makes sense to moderate the pace of our rate increases as we approach the level of restraint that will be sufficient to bring inflation down."


* Powell's comments and a softer US dollar drove the most-active February gold contract on COMEX to a four-month high of $1,797.4 per ounce. However, gains in gold contracts on the domestic bourse were limited by a stronger rupee against the dollar. The most-active February gold contract on MCX rose to a two-week high of 53,488 rupees per 10 gm.


* "Gold bulls were particularly happy with Powell’s comments on Wednesday with the yellow metal rallying strongly to trade at the upper end of its recent range. It faces strong resistance around $1,780 though," Craig Erlam, senior analyst at OANDA, said. 


* Investors and market participants are awaiting the US personal consumption index data which is scheduled for release later today. According to a poll by Dow Jones, core PCE inflation in the US is expected to cool down slightly to 5% on year for October against the prior reading of 5.1%.  


* At 1701 IST, the most-active contracts of bullion were:

   –February gold was up 1% at 53,465 rupees per 10 gm on MCX
   –February gold was up 1.8% at $1,792.4 an ounce on COMEX
   –March silver was up 1.7% at 64,560 rupees per kg on MCX
   –-March silver was up 2.3% at $22.28 an ounce on COMEX


* Outlook for the evening session:

   –MCX gold seen at 53,200–53,600 rupees per 10 gm
   –COMEX gold seen at $1,767–$1,782 an ounce
   –MCX silver seen at 64,000-65,250 rupees per kg
   –COMEX silver seen at $21.90-$22.55 an ounce




US$1 = 81.22 rupees

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


Edited by Vandana Hingorani 



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