Informist, Monday, May 23, 2022

By Chinmay Mungse

MUMBAI – GOLD contracts on the Multi Commodity Exchange of India and COMEX soared today as the US dollar fell significantly against a basket of major currencies, boosting demand for the precious metal.

* The most active June gold contract on MCX touched a 10-day high of 51,147 rupees per 10 gm. The same month contract on COMEX touched a nine-day high of $1,864.3 per ounce.

* Concerns over slower global economic growth and high inflation lifted safe haven demand and bolstered bullion prices.

* "The dollar has retreated from two-decade highs and rising concerns over economic growth have turned investors to safe-haven assets," said Ajay Kedia, research head at Kedia Comtrade.

* According to analysts, the market has factored in a 50-basis-point rate hike from the US Federal Reserve in its June and July policy meetings, which is also supporting bullion prices.

* "Given that at least 50 bps US Fed rate hike move over the next two meetings is already priced in, investors continued to unwind bets for any further US dollar gains," said fxstreet.com in a report.

* Investors are waiting for minutes of the US Fed's May meeting, scheduled to be released on Wednesday, to look for the path that the central bank might take in its future meetings.

* At 1627 IST, the most active contracts of bullion were:
   --June gold was up 0.5% at 51,060 rupees per 10 gm on MCX
   --June gold was up 1% at $1,860.1 an ounce on COMEX
   --July silver was up 1.1% at 62,100 rupees per kg on MCX
   –-July silver was up 2% at $22.08 an ounce on COMEX

* Outlook for the evening session:
   --MCX gold seen at 50,600-51,220 rupees
   --COMEX gold seen at $1,832-$1,870
   --MCX silver seen at 60,900-62,450 rupees
   --COMEX silver seen at $21.55-$22.35.

End

US$1 = 77.51 rupees

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

Edited by Deepshikha Bhardwaj

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