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Informist, Friday, Jan. 24, 2025

By J. Navya Sruthi

MUMBAI – Futures contracts of gold and silver were up on the Multi Commodity Exchange of India on Friday tracking the gains on COMEX due to a weak dollar, analysts said. The most-active February GOLD contract hit a record high of INR 80,073 per 10 grams on the MCX, up 0.6% from Thursday.

At 1730 IST, the February gold contract on MCX was trading at INR 80,004 per 10 gm, up 0.5% from the previous close. The same month contract on COMEX was $2,785.10 per ounce, up 0.7% from the previous close. At 1730 IST, the most-active March SILVER contract on the MCX was up 0.9% at INR 91,970 per kg. The same-month contract on COMEX rose 1.7% to $31.35 per ounce.

The dollar index, which measures the strength of the greenback against a basket of major currencies, was down 0.5% at 107.54 at 1730 IST. A weaker greenback makes dollar-denominated commodities cheaper for those holding other currencies, thus improving demand for precious metals.

Weakness in the dollar index can mainly be attributed to US President Donald Trump's call for an immediate cut in interest rates at the World Economic Forum. Lower interest rates make the non-interest-bearing precious metal more attractive to investors, aiding demand.

"The dollar fell on US President Trump's speech to Davos globalists as he called for lower rates (globally) and urged OPEC (Organization of the Petroleum Exporting Countries) to bring down oil prices to support the economy. Weakness in the dollar aided in the recovery of gold prices," Praveen Singh, associate vice president, fundamental currencies and commodities, Mirae Asset Sharekhan, said in a note.

The fall in the dollar nudged the rupee to end at a two-week high of 86.20 per dollar compared to Thursday's closing.

Safe-haven demand also supported gold prices. "Geopolitical tensions, particularly regarding Russia and Ukraine, led to increased gold investments as a hedge," Kedia Advisory said in a note. "Economic uncertainties, including trade tensions and inflation risks, made gold an attractive investment."

Outlook for the rest of the session:

--MCX gold seen at INR 79,600–INR 82,000 per 10 gm

--COMEX gold seen at $2,755–$2,785 an ounce

--MCX silver seen at INR 90,800-INR 93,200 per kg

--COMEX silver seen at $30.40-$31.20 an ounce

End

US$1 = INR 86.20

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

Edited by Nishant Maher

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