Yen hits 2-week high as US-Japan trade deal boosts sentiment
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Economic Times
23 minutes ago
- Economic Times
Buy the dip in gold? Rupee range & Fed impact explained
Silver may outperform gold, supported by strong base metal fundamentals,' says Anindya Banerjee, Senior VP & Head of Research – Currency, Commodity & Interest Rate at Kotak Securities. He breaks down what's driving the correction in gold and silver, the rebound in the dollar index, and the outlook for USD-INR. Excerpts: ADVERTISEMENT Q. Last week, both metals experienced heavy profit taking. How much of this correction can be attributed to the rebound in the dollar index and the US-Japan trade development? Anindya Banerjee: The relationship between bullion and the dollar index is strong. In addition, interest rate expectations from the Federal Reserve play an important role. Regarding the trade deals, the US recently signed important agreements with Japan and the European Union, and there has been a 90-day extension in the de-escalation between China and the US. These developments create a more stable policy environment, which has supported the dollar index and put downward pressure on gold and silver prices. This is the primary impact of the trade deals on the market as reflected in the dollar index movement. Q. With the Fed's upcoming policy decision and the August 1st US tariff deadline, what is the near-term outlook for precious metals? Could we see a sharp reversal? Anindya Banerjee: Since the crash in April and the unfolding of the Trump tariff drama, the market's expectation for Fed rate cuts has changed significantly. In April, market participants anticipated a reduction of 75 to 100 basis points, but that has now been revised to just a 25-basis-point cut by year-end. This change has supported the dollar index. In the current meeting, no rate cut is expected for July, though pressure may build on the Fed from August onward, particularly as the Trump administration continues to push for more aggressive cuts. However, given the high fiscal deficit and robust asset markets across various asset classes—even with looming tariff-induced inflation, it appears unlikely for the Fed to initiate significant cuts gold, currently in a sideways correction since September, the price range is roughly $3,250 to $3,450 per ounce. On MCX, a key support level is around ₹97,000–₹97,300. Should this support break, gold prices could fall toward $3,250 (or approximately ₹95,000 on MCX). Positional traders should be patient and ready for potential erosion in price toward the lower bound. Silver, meanwhile, might outperform gold in this environment, partly due to its alignment with a strong base metals market.Q. With the dollar index rebounding from three-week lows and showing high volatility, do you expect further strength? How might that affect gold prices and emerging market currencies like the rupee? ADVERTISEMENT Anindya Banerjee: The US dollar index looks poised for a significant rebound, potentially pushing above 102. The decline of earlier expectations that the Fed would implement significant rate cuts, which once drove the dollar index down from nearly 109 to 97, has now reversed. Moreover, the market currently exhibits heavy short positions, suggesting the potential for a short squeeze if a triggering event occurs. Under these conditions, unless a major global risk-off episode further accelerates the dollar's strength, we expect the index to remain largely sideways. This environment supports the notion of a sideways correction in gold prices.Q. The rupee has been weak lately, partly due to a domestic equity sell-off and stalled US-India trade talks. What is your view on the USD-INR for the coming week, especially in light of Fed policy risks? Anindya Banerjee: The uncertainty around trade negotiations between India and the US is weighing on the rupee, compounded by limited capital inflows. While there have been some debt inflows, equity markets are still facing outflows, and FDI figures have declined. Furthermore, the RBI's intervention by buying dollars helps support the lower side of the rupee. Presently, the technical range for the rupee is about 85–87 per USD. A breakout above 87 would be significant and could trigger an all-time high above 88. However, given that a trade deal with the US appears likely—reinforced by additional agreements such as the recent India-UK FTA, the rupee may find further support, keeping it within the current range. ADVERTISEMENT Q. There is significant tension between Thailand and Cambodia right now, along with other unresolved global trade issues. Could geopolitical concerns lend new support to gold and silver despite the recent corrections? Anindya Banerjee: Geopolitical tensions could impact gold and silver prices, but only if they reach a significant magnitude, similar to conflicts involving Israel and Iran or Ukraine and Russia. In the case of Cambodia and Thailand, while the situation is unfortunate, it does not currently have a global impact strong enough to influence bullion prices significantly. Moreover, even when geopolitics play a role, such impacts tend to be short-lived, lasting one to two days before fading. ADVERTISEMENT Q. What can we expect this week for bullion and other commodities? Anindya Banerjee: For bullion, silver appears attractive at its current levels (around ₹1,13,000–₹1,14,000) as medium-term players might consider accumulating longs. Gold should be viewed as a buy on dips, provided buyers are prepared for potential price drops to around ₹95,000 on MCX if key support breaks. On the broader commodity front, copper and aluminum seem promising, while oil is expected to remain range bound. Disclaimer: Recommendations, suggestions, views and opinions given by the experts/brokerages do not represent the views of Economic Times. (You can now subscribe to our ETMarkets WhatsApp channel)
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Business Standard
25 minutes ago
- Business Standard
Qualcomm India eyes vehicle-linked smart glasses in under 3 yrs: President
Chipmaker in talks with Indian automakers to co-develop AI-powered glasses for two- and four-wheeler riders premium Deepak Patel New Delhi Listen to This Article US-based Qualcomm, a fabless semiconductor company, is currently in discussions with Indian two-wheeler as well as four-wheeler automakers to develop AI-powered smart glasses that are integrated with their vehicles and can assist their riders, and these products should be in the market in not more than three years, Savi Soin, president, Qualcomm India, told Business Standard in an interview on Wednesday. 'We can see these smart glasses, which are integrated with four-wheelers and two-wheelers, in the market in less than three years,' Soin said.
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Business Standard
25 minutes ago
- Business Standard
Jane Street yet to resume F&O trade; market vigilance up: Sebi chief
Jane Street has not resumed trading in futures and options (F&O) since the Securities and Exchange Board of India (Sebi) lifted the bar imposed on July 3, said Tuhin Kanta Pandey, the regulator's chairman, in an interview with BusinessWorld. Pandey said that Sebi and exchanges are maintaining 'aggressive surveillance' of the market since the regulator's order against the US-based trading company. He defended the decision to impose only a temporary ban on the company, noting that a permanent one without a show-cause notice or a final order would be 'arbitrary and legally unsustainable.' Sebi lifted Jane Street's trading ban after the firm deposited Rs 4,844 crore in an escrow account and gave an undertaking to refrain from manipulative or fraudulent trading. Addressing concerns about market surveillance, Pandey said, 'Technology is evolving at a breakneck pace, and no regulator can claim to be superhuman. The Jane Street case highlighted the need to upgrade our surveillance systems, and we're actively doing so.' He added that Sebi has introduced new surveillance parameters and is exploring tools that use artificial intelligence to spot anomalies in F&O trading, including unusual delta exposures or spikes in out-of-the-money options. Sebi is also open to external expertise to keep pace with sophisticated market participants. 'Staying ahead of HFT [high-frequency traders] is a cat-and-mouse game, and we're committed to evolving dynamically,' he said. Sebi's ex-parte interim order on July 3 directed the impounding of alleged illegal gains from market manipulation, specifically on index expiry days. 'Our jurisprudence doesn't allow us to treat someone as guilty without due process. The $597 million deposit is a strong signal — unprecedented in itself — that Sebi means business. We're not here to play hero; we're here to build trust through consistent, lawful regulation,' said the Sebi chairman. He clarified that Jane Street was compliant with foreign portfolio investor (FPI) regulations, including disclosures of ultimate beneficiary ownership for stakes above 10 per cent. 'Their trades in F&O don't involve equity ownership,' Pandey noted. The July 3 order was based on surveillance reports provided by the NSE. Sebi has since broadened its investigation to include other indices and trading strategies. Addressing questions about potential data delays from the BSE, Pandey said, 'I wasn't aware of specific delays in BSE's data sharing, but I'll verify this. The Jane Street order focused on the manipulation evidence we already had, primarily from our surveillance and NSE data, which was sufficient for the interim action.'
