Domestic gold buyers may be missing out on softening prices of the metal in the international market thanks to a weaker rupee but punters are still mounting bearish bets on the metal in the local commodity bourse to gain from the downside.
Gold and silver futures contracts on the MCX witnessed a sharp jump in bearish bets as the yellow metal in the overseas market, which local markets track, fell to a near nine-month low and silver plunged to a 15-month low. However, unlike in the overseas market, both MCX gold and silver futures traded above their lows because of a weaker rupee.
Overseas spot gold made a nine-month low and silver dipped to a 15-month low on expectations of a stronger dollar in intraday trading on Thursday. But, MCX gold at Rs 27,026 per 10 gm traded 4.5 per cent above its low on June 6 and silver 4.6 per cent above its low on May 5 this year. This is attributable towards high duty (10 per cent) and a weaker rupee. The rupee, which closed at 60.93 to the dollar on Thursday, was stronger at 59.18 on June 6, when the gold near-month futures contract made its year-to-date low. On May 30, when the silver near-month contract hit its year-to-date low, the rupee was at 59.10 to the dollar.
This post was published at TruthinGold on September 12, 2014.
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