India Bullion: Down as strong US data weakens COMEX futures

BureauUpdated: Saturday, June 01, 2019, 03:09 PM IST
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MUMBAI: Gold futures contracts were trading lower on domestic exchanges today tracking the weakness in COMEX futures, where strong US non-farm payrolls data released Friday dented safe-haven demand for the metal, analysts said.

Local prices also came under pressure as the rupee strengthened against the dollar, they said. Spot markets in Mumbai were closed today as jewellers and traders participated in a strike to protest harassment by government officials, and strict regulations for importing the precious metal.

At 1845 IST, the most-active April gold contract on MCX was down 0.5% at 29,981 rupees per 10 gm. Same-month contract on the commodity division of New York Mercantile Exchange was down 0.1% at $1,336.90 an ounce.

The Indian rupee ended at a seven-month closing high of 60.84 per dollar against 61.08 on Friday.

In the global markets, gold came under pressure as the strong US employment data raised expectations that the US Federal Reserve may continue to trim its bond-buying programme.

The market is now keenly eyeing the geopolitical tensions between Ukraine and Russia. If the concerns ebb then gold will be vulnerable to further losses, analysts said.

“Tensions about Ukraine are likely to persist as Crimea looks for a referendum to join Russia, however, continuing talks between major leaders has curbed safe haven demand. This is evident from retreat in Japanese Yen and rise in US Treasury bond yield.

Gold has been on an upward momentum for last few weeks and recent development may trigger some profit taking,” said a report by Kotak Commodity Services. Russian President Vladimir Putin on Sunday, defying Western threats of sanctions, supported Crimea’s move to secede from Ukraine. Russian officials have said the Crimean region could join the country as soon as this month.

The metal received some support at lower levels as investor interest in gold has renewed. Gold holdings of SPDR Gold Trust gained 1.5 tn from the previous session to 805.2 tn on Friday, data on website of world’s largest gold exchange- traded fund showed.

Silver futures on MCX were trading lower tracking global markets, where weakness in base metals and gold pulled prices lower.

On MCX, May silver contract was down 0.7% at 45,900 rupees a kg and same- month contract on COMEX was down 0.3% at $20.88 an ounce.

OUTLOOK In rest of the session, gold futures on COMEX may trade lower as safe-haven demand fades, analysts said. The April gold contract may find immediate support at $1,325 and face resistance at $1,350. On MCX, the same month contract is likely to find support at 29,900 rupees and face resistance at 30,150 rupees.

The May silver contract on MCX is likely to trade in a range of 45,500- 46,200 rupees. COMEX contract may find support at $20.50 and face resistance at $21.10, analysts said.

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