India Bullion:Gold down on COMEX cues as Fed hints at rate hike soon

Informist, Thursday, Dec 2, 2021


By Chinmay Mungse


MUMBAI – GOLD prices on the Multi Commodity Exchange of India and COMEX were trading in the red today after the US Federal Reserve Chair Jerome Powell said that the central bank could speed up its asset purchase tapering programme and subsequent increase in interest rates.


* According to reports, Powell said on Tuesday that the US central bank will consider acting more quickly to dial back its low-interest rate policies to counter higher inflation. Experts believe this will allow the Fed to begin raising its key short-term rate as early as the first half of next year.


* Tapering of the expansionary policy by the US central bank and anticipation of a hike in interest rates were major setbacks for the bullion metal prices today, said Angel One Commodities in a report.


* Easing concerns over the Omicron variant of the COVID-19 virus also weighed on gold prices. US President Joe Biden's statement that the new variant is not a cause of panic has boosted market sentiment and weighed on haven demand, said Ajay Kedia, head of research at Kedia Capital. 


* "However, the concerns have not fully receded yet and the report of first case of Omicron in US will keep downside capped," added Kedia.


* US labour market data compiled by ADP Research Institute shows 534,000 new jobs being added in the US. "The figure tallied with analysts expectations and hence did not have a significant impact on the prices," Commerzbank AG said.


* Meanwhile, gold holdings with SPDR Gold Trust fell by 2.03 tn on Wednesday to 990.82 tn, according to data on the website of the world's largest gold exchange-traded fund. Silver assets with iShares Silver Trust fell by 23.02 tn to 17,044.77 tn on Wednesday, the steepest decline in more than a week.


* At 1708 IST, the most-active contracts of bullion were:
   –February gold was down 0.3% at 47,748 rupees per 10 gm on MCX
   –February gold was down 0.4% at $1,777.6 an ounce on COMEX
   –March SILVER was flat at 61,266 rupees per kg on MCX
   –-March silver was up 0.2% at $22.38 an ounce on COMEX


* Outlook for the evening session:
   –MCX gold seen at 47,400-47,920 rupees
   –COMEX gold seen at $1,758-$1,794
   –MCX silver seen at 60,771-63,208 rupees
   –COMEX silver seen at $22.56-$23.61. End



US$1 = 74.99 rupees

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


Edited by Snigdha Kuttikat


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