NW18: MCX gold down 1%, silver falls 1.5% tracking COMEX; rupee supports NewsWire18, Thursday, Nov 17

NW18: MCX gold down 1%, silver falls 1.5% tracking COMEX; rupee supports
NewsWire18, Thursday, Nov 17
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By Samantha Menacherry
MUMBAI - Gold futures were trading nearly 1% lower on the MCX tracking
fall in benchmark COMEX contracts, where lower-than-expected US inflation data
Wednesday dampened market sentiment as the metal is perceived to be an
inflation hedge.
The downtrend in domestic futures was limited as the rupee depreciated
against the dollar today. The rupee ended at 50.90 per dollar compared with
50.74 Wednesday. A weak rupee makes dollar-denominated gold more expensive to
import.
At 1820 IST, December gold contract on MCX was at 28,783 rupees per 10 gm,
down 213 rupees from previous close, while the December contract on COMEX was
down $26.30 at $1,748.00 an ounce.
Gold has once again been caught in a broad-based commodity sell-off
today that was triggered due to heightened concerns over Eurozone after
Spanish bond yields surged, and as Fitch Rating agency warned that US banks
could face severe risks from the Eurozone debt crisis, analysts said.
"In the near-term, the metal may extend its fall to $1,700-$1,710 but the
impact of the sell-off may be reduced in the domestic markets due to the
ongoing depreciation in the rupee," said Rajeev Darji, senior research
analyst at X-Trade Brokers (Europe).
Good physical demand in the local markets at lower level may also provide
some support to the metal, analysts said.
Gold prices are likely to show some improvement in physical demand in
Oct-Dec due to the onset of the wedding season, Ajay Mitra, managing
director, India and West Asia, World Gold Council told reporters after the
release of the Gold Demand Trends report here today.
According to the report, the total gold demand in India fell 23% on year
to 203.3 tn in Jul-Sep.
On Wednesday, gold holdings of SPDR GoldTrust, the largest gold-backed
exchange traded fund, gained 9 tn to 1,277 tn, according to data on its
website.
Silver futures on MCX were trading 1.5% lower today mirroring COMEX
contracts, where weakness in gold and base metals pulled down prices.
"Silver had been trading in the range of $33.5-$35.0 (an ounce), but the
metal has now broken the support level of $33.5 and may extend the downtrend
to $30-$31 in the near term," Darji said.
Silver holdings of iShares Silver Trust, the world's largest silver
exchange-traded fund, were unchanged from previous session at 9,784 tn
Wednesday, according to data on its website.
December silver contract on MCX was at 56,267 rupees a kg, down 890 rupees.
The same-month contract on COMEX was down 75.20 cents at $33.07 an ounce.
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OUTLOOK
Gold futures on COMEX may continue to trade lower today and market will
eye key US economic data such as initial jobless claims and new residential
construction, analysts said.
December gold contract on COMEX may face resistance at $1,765 an ounce,
while support is seen at $1,730.
MCX December gold contract may face resistance at 28,960 rupees, while
support is seen at 28,500 rupees. The December silver contract on MCX is likely
to trade in the range of 55,500-57,300 rupees. End
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US$1 = 50.90 rupees
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
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Edited by Arshad Hussain
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