India Bullion
MCX gold hits all-time high ahead of US Fed's policy outcome
This story was originally published at 19:37 IST on 29 January 2025
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--MCX Feb gold contract hits record high of INR 80,517 per 10 grams
--Spot gold hits new all-time high of INR 80,975 per 10 grams in Mumbai
By Sandeep Sinha
MUMBAI – Futures contracts of gold scaled an all-time high of INR 80,517 per 10 grams on the Multi Commodity Exchange of India, tracking contract on the COMEX, ahead of the US Federal Reserve's policy meeting outcome early Thursday. Positive sentiment for the yellow metal was further lifted by inflows in gold exchange-traded funds.
The trend remains bullish for gold as it is trading above the key averages on the daily chart and the momentum indicator Relative Strength Index is at 61.59, suggesting more upside in the price, analysts said.
"The recent divergence between traditionally negative correlations of gold and yields suggests increasing demand for the metal as a hedge against geopolitical and economic uncertainties," Daria Efanova, head of research at Sucden Financial, said in a note.
The spot gold prices in the Mumbai bullion market touched a new life-time high of INR 80,975 per 10 grams, plus 3% goods and services tax, on reports of an import duty hike in the upcoming Budget on Saturday. Price of 22-carat gold was INR 74,173 per 10 grams and 18-carat gold was INR 60,713 per 10 grams.
On Tuesday, gold holdings by SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose by 4.02 tonnes to 861.04 tonnes, the first inflow after six days of outflows. The fund has a market value of $76.15 billion. On the National Stock Exchange, the total value of gold ETFs traded Wednesday was INR 864 million.
At 1818 IST, the most-active February GOLD contract on the MCX was up 0.2% at INR 80,480 per 10 grams. The most-active February contract on the COMEX rose 0.1% to $2,769 per ounce. The highest call open interest was at INR 81,000 strike price, suggesting a bullish view. The highest put open interest was at INR 79,000-INR 78,000 strikes for the Feb. 28 contract.
"Any dovish signals from Fed could support bullish momentum in gold while a hawkish stance may trigger some profit booking. In the domestic market, INR 79,500 per 10 gram acts as a key support level, while INR 81,100 per 10 gram serves as the next major resistance," Jateen Trivedi, vice-president and research analyst at LKP Securities, said in a note.
SILVER contracts traded higher taking cues from COMEX and a firm trend in gold and industrial metals. At 1820 IST, the most-active March contract on the MCX was up 0.4% at INR 91,420 per kilogram. The same-month contract on the COMEX was up 0.5% at $31.02 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 real-time performance of gold and silver futures on the MCX, was up 42 points at 19390. Until 1822 IST, the February and April gold contracts recorded turnover of INR 18.11 billion and INR 23.24 billion, respectively. The March and May silver contracts saw turnover of INR 9.64 billion and INR 1.33 billion, respectively.
The spot gold-silver ratio, also known as the Mint ratio, fell to 90.31 Wednesday, indicating that gold had underperformed silver. On Tuesday, the ratio was at 90.99. The ratio measures the ounces of silver required to buy an ounce of gold.
Outlook for the rest of the session:
--MCX gold seen at INR 80,093–INR 80,777 per 10 gm
--COMEX gold seen at $2,758.0–$2,810.0 an ounce
--MCX silver seen at INR 90,641-INR 92,080 per kg
--COMEX silver seen at $30.64-$31.42 an ounce
End
US$1 = INR 86.54
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Subhojit Sarkar
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