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India Bullion: Down; sub-$1,300/oz on COMEX post robust US jobs data

Thursday, Apr 11

 

By Roshni Devi

 

MUMBAI – Bullion contracts on the Multi Commodity Exchange of India fell more than 1%, and the most-active June gold contract on COMEX slipped below the key psychological level of $1,300 an ounce today as weekly jobless claims in the US fell to a 50-year low, analysts said.

 

The rupee's strength against the dollar weighed on domestic prices of precious metals. A firm rupee makes the import of dollar-denominated commodities such as gold cheaper.

 

At 1922 IST, the June gold contract on MCX was at 31,970 rupees per 10 gm and the same-month contract on COMEX was at $1,299 an ounce, each down 1% from the previous close.

 

Initial jobless claims in the US fell by 8,000 to 196,000 in the week ended Saturday, the Labor Department reported today. The US producer price index rose 0.6% in March, significantly higher than market expectations of 0.3%.

 

"The stronger-than-expected employment data appears to be weighing on gold as prices trade near session lows," Kitco News said in a report.

 

At a special summit on Wednesday, official from the European Union and the UK agreed to extend the window for the UK's exit from the bloc till Oct 31. The UK will be able to leave the EU earlier if UK Prime Minister Theresa May forges a deal with the Parliament for a soft Brexit.

 

"This removes the possibility of a no-deal Brexit from the table for the time being…Gold responded by falling," Commerzbank AG said in a report.

 

Silver prices were beaten down by the double whammy of a fall in gold prices and the downtrend in industrial metals due to worries over global economic growth.

 

Base metals on the London Metals Exchange, which provide cues to silver prices, were in the red after the International Monetary Fund slashed its global growth forecast for 2019 and US President Donald Trump threatened to impose tariffs on imports from the EU in retaliation against the bloc subsidising Airbus.

 

The May silver contract on MCX was down 1.4% at 37,331 rupees per kg and the same-month contract on COMEX was at $15.04 an ounce, each down 1.4% from the previous close.

 

OUTLOOK

"Gold's rise stalled as there was little positive impetus from FOMC (Federal Open Market Committee) minutes, and we could see some correction, but we maintain buy on dips view as global economic uncertainty and dovish stance of central banks will continue to support, Kotak Securities said in a report. 

 

For the rest of the day, gold contracts on MCX are seen trading at 31,599-32,841 rupees. On the COMEX, prices are seen in a range of $1,296.90-$1,306.60.

 

The silver contract on MCX is seen at 37,221-38,082 rupees, and at $15.09-$15.31 on COMEX.  End

 

US$1 = 68.92 rupees

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

 

Edited by Avishek Dutta

 

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