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Informist, Thursday, Dec. 26, 2024

By Sandeep Sinha

MUMBAI – Futures contracts of gold on the Multi Commodity Exchange of India and COMEX traded in positive territory because geopolitical tensions in West Asia boosted safe-haven demand. However, the upside in the yellow metal was limited because of a firm dollar, which makes commodities priced in the greenback expensive for holders of other currencies.

At 1852 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was up 0.1% at 108.18. Trading volumes are likely to be on the lower side as most traders in Western countries are away on holiday.

Gold edged higher, extending its tepid performance as investors remained cautious about the rising dollar following the US Federal Reserve's hawkish tilt, Motilal Oswal Financial Services said in a note.

At 1852 IST, the most-active February GOLD contract on the MCX was up 0.6% at INR 76,700 per 10 grams. The most-active February contract on COMEX was 0.4% higher at $2,644.70 per ounce. The highest call open interest for gold was at INR 78,000-INR 79,000 strike prices, suggesting a bullish view. The highest put open interest was at the INR 76,000-INR 75,000 strike for the Dec. 31 contract.

"With the holiday-shortened week, thin trade volumes reflected traders' hesitation to make significant moves. For the year-end, INR 76,000 is expected to act as a strong support level for gold, maintaining stability amidst subdued market activity," Jateen Trivedi, vice-president and research analyst at LKP Securities, said in a note.

On Tuesday, gold holdings with SPDR Gold Trust, the world's largest gold-backed ETF, remained steady at 873.95 tonnes. The fund has a market value of $73.42 billion. On the National Stock Exchange, the total value of gold ETFs traded on Thursday was INR 813.1 million.

SILVER prices rose, taking cues from COMEX, and strength in gold and industrial metals. At 1852 IST, the most-active March contract of silver on the MCX was up 0.5% at INR 89,761 per kilogram. The same-month contract on COMEX was 0.4% higher at $30.39 per ounce.

On the options front, the highest call open interest was at the INR 100,000 strike price. The highest put open interest was at INR 90,000 strike for the Feb. 24 expiry contract.

The MCX Bulldex, an index that tracks the real-time performance of gold and silver futures on the MCX, was up 115 points at 18693 points. As of 1852 IST, the February and April gold contracts recorded turnovers of INR 24.50 billion and INR 1.12 billion, respectively. The March and May silver contracts saw turnover of INR 13.23 billion and INR 613.48 million, respectively.

The spot gold-silver ratio, also known as the Mint ratio, fell to 88.19 on Thursday, indicating that gold underperformed silver. The ratio measures the ounces of silver required to buy an ounce of gold. The ratio was 88.34 on Thursday.

Outlook for the rest of the session:

--MCX gold seen at INR 76,371–77,040 per 10 gm

--COMEX gold seen at $2,618.0–$2,664.0 an ounce

--MCX silver seen at INR 88,936-90,070 per kg

--COMEX silver seen at $29.88-$30.84 an ounce

End

US$1 = INR 85.26

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Saji George Titus

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