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Informist, Wednesday, Jan. 15, 2025

By Sandeep Sinha

MUMBAI – Futures contracts of gold rose on the Multi Commodity Exchange of India and the COMEX on Wednesday as the dollar weakened ahead of the US consumer price index data later in the day. Money managers raising their long positions and fresh inflows into gold exchange-traded funds also lifted the sentiment.

"Gold experienced positive buying momentum as a weaker dollar index lent support to the metal. However, the possibility of white flags in West Asia (Middle East) could lead to profit booking at higher levels," Jateen Trivedi, vice-president and research analyst at LKP Securities, said in a note. Market participants are keenly awaiting the US CPI data as it will offer significant insights into the Federal Reserve's stance on interest rates, potentially impacting gold's trajectory, Trivedi said.

At 1645 IST, the dollar index, which measures the strength of the greenback against a basket of major currencies, was down 0.2% at 109.02. A weaker greenback makes dollar-denominated precious commodities cheaper for those holding other currencies, thus improving demand.

Money managers increased their net long position in COMEX gold by 12,115 lots to 194,499 as of Jan. 7, indicating bullish momentum for the yellow metal, according to Commodity Futures Trading Commission data. Investors will also take cues from the US Empire State manufacturing index data to be released later Wednesday.

On Tuesday, gold holdings with SPDR Gold Trust, the world's largest gold-backed ETF, rose by 1.44 tonnes to 872.52 tonnes. The fund has a market value of $74.78 billion. On the National Stock Exchange, the total value of gold ETFs traded on Wednesday was INR 1 billion, down from INR 1.33 billion on Tuesday.

At 1656 IST, the most-active February GOLD contract on the MCX was up 0.5% at INR 78,555 per 10 grams. The most-active February contract on the COMEX was 0.9% higher at $2,707.40 per ounce. The highest call open interest for gold was at INR 79,000-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 higher, taking cues from COMEX, and firm trend in gold. At 1658 IST, the most-active March contract on the MCX was up 0.7% at INR 91,190 per kg. The same-month contract on the COMEX was 1.3% higher at $30.73 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 123 points at 19100 points. Until 1700 IST, the February and April gold contracts recorded turnover of INR 16.67 billion and INR 3.56 billion, respectively. The March and May silver contracts saw a turnover of INR 11.10 billion and INR 713.30 million, respectively.

The spot gold-silver ratio, also known as the Mint ratio, fell to 89.44 on Wednesday, indicating that gold had underperformed silver. The ratio measures the ounces of silver required to buy an ounce of gold. The ratio was 89.77 on Tuesday.

Outlook for the rest of the session:

--MCX gold seen at INR 77,940–INR 78,860 per 10 gm

--COMEX gold seen at $2,678.83–$2,722.23 an ounce

--MCX silver seen at INR 90,490-INR 91,580 per kg

--COMEX silver seen at $30.42-$31.18 an ounce

End

US$1 = INR 86.36

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

Edited by Saji George Titus

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