Informist, Tuesday, May 24, 2022

By Chinmay Mungse

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

* The dollar fell as the euro gained following hawkish comments from the European Central Bank President Christine Lagarde. 

* Lagarde said in a blog post on Monday that ECB is likely to lift the euro area deposit rate out of the negative territory by the end of September and could raise it further if it saw inflation stabilising at 2%. Lagarde also hinted at a 25-basis-point interest rate hike each in the July and September policy meetings of the ECB.

* "The greenback came under renewed selling pressure after the Euro rebounded sharply on the latest hawkish comments from ECB President Christine Lagarde," said fxstreet.com in a report.

* Continued global economic growth pressures and higher inflation concerns also supported gold prices. "Prices also found support after growth concerns in the economy and worries about inflation remained," said Sriram Iyer, senior analyst at Reliance Securities.

* Meanwhile, gold holdings with SPDR Gold Trust rose by 4.64 tn to 1,068.07 tn on Monday, according to data on the website of the world's largest gold exchange-traded fund. 

* Investors and market participants are now focussing on the minutes of the US Federal Reserve's May meeting and the US Fed Chair Powell's speech later this week.

* At 1703 IST, the most active contracts of bullion were:
   --June gold was up 0.3% at 51,057 rupees per 10 gm on MCX
   --June gold was up 0.5% at $1,856.6 an ounce on COMEX
   --July silver was up 0.6% at 61,648 rupees per kg on MCX
   –-July silver was up 0.9% at $21.92 an ounce on COMEX

* Outlook for the evening session:
   --MCX gold seen at 50,700- 51,200 rupees
   --COMEX gold seen at $1,830-$1,895
   --MCX silver seen at 60,850-62,020 rupees
   --COMEX silver seen at $21.52-$22.40.

End

US$1 = 77.58 rupees

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

Edited by Michael Correya

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