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Informist, Monday, Jan. 13, 2025

By Sandeep Sinha

MUMBAI – Futures contracts of gold rose on the Multi Commodity Exchange of India on Monday because of weakness in the rupee, while contracts on COMEX fell due to a strong dollar. Stronger-than-expected US nonfarm payrolls data pushed the Dollar Index to a 14-month high and weighed on bullion prices in the international market.

The rupee plunged 0.7% against the dollar and closed at a new lifetime low of 86.58 because of selling by foreign funds and importers' purchase of the greenback. A weaker rupee makes dollar-denominated commodities expensive for domestic buyers.

Nonfarm payrolls in the US in December were at 256,000, up from 227,000 in November, data released by the US Bureau of Labor Statistics on Friday showed. Analysts polled by Dow Jones had estimated the payrolls at 155,000.

At 1545 IST, the Dollar Index, which measures the strength of the greenback against a basket of major currencies, was up 0.4% at 110.02. Investors will also take cues from the US consumer price index to be released on Wednesday.

"Gold is expected to be under pressure in the short term on stellar US monthly job report as the Fed rate cut chances dwindle. However, extreme weakness in the rupee is negating the decline," associate vice-president, fundamental currencies and commodities, Mirae Asset Sharekhan, said in a note.

At 1545 IST, the most-active February GOLD contract on the MCX was up 0.2% at INR 78,553 per 10 grams. The most-active February contract on the COMEX was 0.4% lower at $2,704.20 per ounce. The highest call open interest for gold was at INR 78,000-INR 80,000 strike prices, suggesting a bullish view. The highest put open interest was at the INR 77,000-INR 76,000 strikes for the Jan. 27 contract.

On Friday, gold holdings with SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose by 5.74 tonnes to 876.82 tonnes. The fund has a market value of $75.73 billion. On the National Stock Exchange, the total value of gold ETFs traded on Monday was INR 2.73 billion, up from INR 1.38 billion in the previous session.

SILVER contracts traded lower taking cues from COMEX and a strong dollar. At 1603 IST, the most-active March contract on the MCX was down 0.8% at INR 91,752 per kilogram. The same-month contract on the COMEX was 1.4% lower at $30.89 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 43 points at 19100 points. Until 1605 IST, the February and April gold contracts recorded turnovers of INR 19.90 billion and INR 7.32 billion, respectively. The March and May silver contracts saw turnovers of INR 17.48 billion and INR 1.29 billion, respectively.

The spot gold-silver ratio, also known as the Mint ratio, rose to 89.18 on Monday, indicating that gold had outperformed silver. The ratio measures the ounces of silver required to buy an ounce of gold. The ratio was at 88.45 on Friday.

Outlook for the rest of the session:

--MCX gold seen at INR 78,060–INR 78,790 per 10 gm

--COMEX gold seen at $2,691.20–$2,739.30 an ounce

--MCX silver seen at INR 91,050-INR 93,803 per kg

--COMEX silver seen at $30.72-$31.28 an ounce

End

US$1 = INR 86.58

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

Edited by Ashish Shirke

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