MCX gold clears Rs 1.54 lakh as the dollar slips and Brent holds near $98

Indian gold futures rose about Rs 1,100 on 8 September and crossed the Rs 1.54 lakh mark on the Multi Commodity Exchange. Silver gained about Rs 2,300 and moved back above Rs 2.41 lakh per kilogram. Spot gold in the global market traded above $4,430 an ounce, up nearly 1 percent. Spot silver was near $67 an ounce, up more than 1.2 percent.

The dollar index, which measures the US currency against six peers, was near 98.80, down 0.37 percent and on a second straight decline. A weaker dollar makes bullion cheaper for holders of other currencies. The yen had gained on talk of tighter policy at the Bank of Japan and on an unwind of carry trades. That mix is the simple bid under Tuesday's print.

Oil in the same tape

Brent was near $97.61 a barrel in early deals, up about 0.63 percent, and later prints put it closer to $98. West Texas Intermediate was above $93. The oil move is the Hormuz file: tanker strikes, a US-Iran fight now six months old, and traffic through the strait running well below pre-war volumes. Gold usually falls when real yields rise. It is rising here because the same war that lifts crude also lifts the hedge bid, and because the dollar is giving way at the same time.

The rupee opened at 94.49 against the dollar and printed 94.66, a 10-paise fall from the previous close of 94.56. Anil Kumar Bhansali of Finrex Treasury Advisors said Reserve Bank dollar sales are what stop the oil shock from running through the currency. Sensex and Nifty opened lower. Foreign funds bought a net Rs 280.13 crore of Indian equities on Monday, according to exchange data.

What a jeweller sees

A Rs 1,100 jump on MCX is a wholesale print. Retail 24-carat and 22-carat tags in Mumbai, Delhi and Ahmedabad move with a lag and with local premia. Households that bought sovereign gold bonds in 2016-17 Series II at Rs 4,682 a gram were offered premature redemption near Rs 15,334 a gram on 7 September, a 228 percent capital gain plus 2.5 percent annual interest. That redemption is a separate window. It shows where the nine-year hold now sits relative to Tuesday's future.

Silver's move above Rs 2.41 lakh a kilogram is the more violent print. Industrial demand and the same dollar slide are both in that number. Unlike gold, silver does not have a central-bank bid of the same size. When it jumps 1 percent with gold it is usually following the hedge tape, not a factory order.

The useful pairing on 8 September is gold up, oil up, rupee down, dollar down. That set does not last every week. It lasts while Hormuz stays tight and while Tokyo keeps the yen bid. A quiet day in the strait and a firm dollar would unwind both legs. Until then the MCX number is the one Indian buyers will see on the ticket.