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Informist, Friday, Dec. 27, 2024

By Sandeep Sinha

MUMBAI – Futures contracts of gold marginally rose on the Multi Commodity Exchange of India, despite weak cues from COMEX, because of the sharp depreciation in the rupee against the dollar, which makes precious metals priced in dollars expensive for domestic buyers.

The rupee hit a fresh lifetime low of 85.81 during intraday trade Friday and settled at a record closing low of 85.53, down 0.3%. 

"Volatile Indian rupee and US yields are likely to have a major impact on gold prices in rupee terms. Still, overall gold is expected to trade with a positive bias into the year-end on positive ETF flows, subdued US data and central bank buying," Praveen Singh, associate vice-president, fundamental currencies and commodities, at Mirae Asset Sharekhan said in a note. 

At 1750 IST, the most-active February GOLD contract on the MCX was up 0.1% at INR 76,878 per 10 grams. The most-active February contract on COMEX was 0.3% lower at $2,645.20 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.

As many traders are on holiday ahead of the New Year, the yellow metal is likely to trade in a range because of low volume and lack of fresh cues.

On Thursday, gold holdings with SPDR Gold Trust, the world's largest gold-backed ETF, fell by 1.15 tonnes to 872.80 tonnes. The fund has a market value of $73.32 billion. On the National Stock Exchange, the total value of gold ETFs traded on Friday was INR 799.2 million, down from INR 813.1 million on Thursday.

SILVER prices were a tad up, despite weak cues from COMEX, on account of weak rupee. At 1852 IST, the most-active March contract of silver on the MCX was up 0.1% at INR 89,680 per kilogram. The same-month contract on COMEX was 0.5% lower at $30.23 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 down 21 points at 18689 points. As of 1800 IST, the February and April gold contracts recorded turnovers of INR 24.36 billion and INR 1.43 billion, respectively. The March and May silver contracts saw turnover of INR 12.06 billion and INR 865.53 million, respectively.

The spot gold-silver ratio, also known as the Mint ratio, rose to 88.63 on Friday, indicating that gold outperformed silver. The ratio measures the ounces of silver required to buy an ounce of gold. The ratio was 88.25 on Thursday.

Outlook for the rest of the session:

--MCX gold seen at INR 76,330–77,250 per 10 gm

--COMEX gold seen at $2,622.0–$2,664.0 an ounce

--MCX silver seen at INR 89,100-90,200 per kg

--COMEX silver seen at $30.14-$30.84 an ounce

End

US$1 = INR 85.53

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

Edited by Saji George Titus

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