India Bullion
Gold prices up on safe-haven demand, gains over 6% in January
This story was originally published at 20:23 IST on 31 January 2025
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By Sandeep Sinha
MUMBAI – Futures contracts of gold on the Multi Commodity Exchange of India and the COMEX rose on Friday, as the looming threat of tariffs by US President Donald Trump boosted the metal's safe-haven demand. The yellow metal is on track for a monthly gain in the first month of 2025, having risen 6.3% on MCX and 6.9% on COMEX, respectively so far.
"The accommodative monetary policies from major central banks, including the European Central Bank's rate cuts and the Bank of Canada's end to quantitative tightening, along with earlier cuts by the Riksbank, have bolstered gold's upward momentum," Kotak Securities said in a note.
At 1940 IST, the most-active April gold contract on the MCX was up 0.4% at INR 82,374 per 10 grams, after hitting an all-time high of INR 82,415 earlier in the day. The most-active April gold contract on COMEX was up 0.1% at $2,848.20 per ounce. The highest call open interest was at INR 82,000-INR 84,000 strike prices, suggesting a bullish view. The highest put open interest was at INR 80,000-INR 79,000 strikes for the Feb. 28 contract.
However, strength in the dollar and outflows from gold exchange-traded funds limited further gains. At 1945 IST, the Dollar Index, which measures the strength of the greenback against a basket of major currencies, was up 0.1% at 108.28. A firm greenback makes dollar-denominated precious commodities expensive for those holding other currencies.
On Thursday, gold holdings with SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell by 1.15 tonnes to 864.19 tonnes. The fund has a market value of $77.42 billion. On the National Stock Exchange, the total value of gold ETFs traded on Friday was INR 2.18 billion, up from INR 1.32 billion on Thursday.
SILVER contracts traded higher, taking cues from COMEX and a firm trend in gold. At 1945 IST, the most-active March contract on the MCX was up 0.5% at INR 93,865 per kilogram. The same-month contract on the COMEX was up 0.4% at $32.62 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 110 points at 19778. Until 1948 IST, the February and April gold contracts recorded turnovers of INR 4.03 billion and INR 31.01 billion, respectively. The March and May silver contracts saw turnovers of INR 19.15 billion and INR 1.73 billion, respectively.
The spot gold-silver ratio, also known as the Mint ratio, marginally rose to 88.89 on Friday, indicating that gold had outperformed silver. On Thursday, the ratio was at 88.83. 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 81,864–INR 82,591 per 10 gm
--COMEX gold seen at $2,839.10–$2,857.70 an ounce
--MCX silver seen at INR 93,060-INR 94,567 per kg
--COMEX silver seen at $31.95-$33.20 an ounce
End
US$1 = INR 86.61
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Avishek Dutta
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