Traders increase bullish bets on gold, silver & oil

Bullish bets on these have increased on the MCX, where these are traded, with open interest rising fast.

With the dollar index drifting lower to an eight-month low of around $93.5, following slow US economic growth expectations, commodities — especially gold, silver and crude oil —surged to new highs.

Bullish bets on these have increased on the Multi Commodity Exchange, where these are traded, with open interest (OI, total number of options or futures contracts not closed or delivered at the end of the day) rising fast.

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Advance data for the March quarter in the US indicates the economy would grow at 0.5 per cent, from the previous quarter's rise of 1.4 per cent. Yen was also at 8 month high at 107.075.

Slowing growth attracted investors to commodities, led by gold and silver, trading around $1,279 and $17.8 an ounce, respectively. In India, on the MCX, traders raised bullish bets as prices started surging with a fresh impetus from slower US growth. In the spot market here, standard gold is at a two-year high and silver at an 18-month high, respectively inching towards Rs 30,000 per 10g and Rs 42,000 per kg, respectively. On Friday, standard gold of 99.5 purity closed at Rs 29,820 per 10g and silver at Rs 41,875 a kg. OI in gold on the MCX in near-month contracts surged to over 12,000 lots and crude oil OI to over 27, highest in a fortnight.

Bachhraj Bamalva, director, Gems and Jewellery Trade Federation, said: “People are waiting buy gold on the auspicious day of Akshaya Tritiya. However, the current high prices of precious metals are unsustainable and due to speculative positions.”

Gold and silver prices have surged 20 and 25 per cent, respectively, this calendar year in India. Crude oil has also seen a sharp recovery and Brent crude at its highest level since November at $47.04 a barrel in the spot market; futures are above $48. WTI oil is trading at $46.03. The global market is now getting convinced that crude oil is heading towards rebalancing of supply with demand sooner than expected.