It’s another Friday and another jump in prices of gold and silver globally, following which, the domestic spot market saw another rise on Saturday. Last week, it was the hope of QE3 from the US Federal Reserve that kept gold prices up, while yesterday, the US announced weaker job data, leading to a nearly three per cent jump in gold.
On Saturday in Mumbai the market gold was up 1.93 per cent or Rs 605 to Rs 31,955 per 10 gm, while silver maintaining its recent trend of outperforming gold was up three per cent, or Rs 1,825 to Rs 62,930 per kg. America added 96,000 workers last month following a revised 141,000 increase in July that was less than first estimated. As a result, the Dollar Index, a gauge of the currency against six major peers, slid 1.1 percent to the lowest level since May and the euro rallied 1.4 percent to $1.2812, while gold went up six-month high to $1,745 an ounce (ounce=31.1 gramme). Silver, however, settled at $1,735 and $33.66 per ounce.
With gold prices moving up consistently in the last few weeks, traders have increased their bullish bets on gold and silver again.
Average daily volumes rose in September to 36,228 contracts, compared with 29,667 contracts in August and open interest went up from 17,218 contracts last month to 20,691 contracts in the current month. Average daily open interest is at year's high. Similarly in silver, average daily volume is the highest after February 2012 at 64,885 contracts, 23 per cent higher compared to August.
“Traders here have turned bullish on hope of QE3 coming next week as the US Fed may announce this after the FOMC (Federal Open Market Committee) meeting on Thursday evening. Traders are eyeing next gold target at $1,820,” said Atul shah, chief operating officer at Emkay Commodities.
In the international market also traders and hedge funds have raised their bullish bets on gold and silver to their largest holding since March on expectations of easing measures from major central banks. Speculators in gold raised their net length by 13,088 contracts to 144,775 contracts during the week ended September 4, data from the Commodity Futures Trading Commission (CFTC) showed yesterday.
This was the largest net long position the group has held since the week of March 11, when they were long on 145,997 contracts. In silver, the group added 2,626 contracts to bring their net long position to 28,153 contracts, the largest holding since the week of March 4, when they were long on 33,503 contracts. After switching to a net long position in copper last week for the first time in 14 weeks, speculators dumped 2,586 contracts this week to hold a net long position of just 674 contracts.
Inputs from agencies