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Informist, Tuesday, Jan. 14, 2025

By Sandeep Sinha

MUMBAI – Gold futures contracts were steady on the Multi Commodity Exchange of India and COMEX after the big fall Monday as the US dollar surged to a fresh 14-month high. The upside in the yellow metal was also capped by outflows in gold exchange-traded funds.

At 1600 IST, the Dollar Index, which measures the strength of the greenback against a basket of major currencies, was up 0.1% at 109.56. A firm greenback makes dollar-denominated precious commodities expensive for those holding other currencies, dulling demand.

On Monday, GOLD holdings with the SPDR Gold Trust, the world's largest gold-backed ETF, fell by 2.29 tonnes to 874.53 tonnes. The fund has a market value of $75.02 billion. On the National Stock Exchange, the total value of gold ETFs traded Tuesday was INR 1.46 billion, down from INR 2.73 billion in the previous session.

Investors will also take cues from US core Producer Price Index data later Tuesday. They will also watch out for US CPI data Wednesday for clues to the US Federal Reserve's interest rate path.

"Gold is likely to decline further in the coming days unless the upcoming US CPI data turns out to be subdued. Selling with a stop-loss into recovery is preferred in ultra short term," said Praveen Singh, associate vice-president, fundamental currencies and commodities, Mirae Asset Sharekhan, in a note.  

At 1600 IST, the most-active February gold contract on the MCX was flat at INR 78,157 per 10 grams. The most-active February contract on COMEX was steady at $2,679.0 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.

SILVER contracts traded a tad lower, despite steady cues from COMEX, as investors resorted to profit-taking. At 1603 IST, the most-active March contract on the MCX was down 0.2% at INR 90,350 per kg. The same-month contract on COMEX was flat at $30.31 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 just 4 points at 18998 points. Until 1605 IST, the February and April gold contracts recorded turnovers of INR 14.90 billion and INR 3.93 billion, respectively. The March and May silver contracts saw turnovers of INR 10.52 billion and INR 725.88 million, respectively.

The spot gold-silver ratio, also known as the Mint ratio, rose to 89.7 on Tuesday, indicating that gold had outperformed silver. The ratio measures the ounces of silver required to buy an ounce of gold. The ratio was at 89.29 on Monday.

Outlook for the rest of the session:

--MCX gold seen at INR 77,929–INR 78,585 per 10 gm

--COMEX gold seen at $2,663.0–$2,711.60 an ounce

--MCX silver seen at INR 89,620-INR 92,040 per kg

--COMEX silver seen at $30.18-$30.48 an ounce

End

US$1 = INR 86.63

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

Edited by Rajeev Pai

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