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Informist, Tuesday, Feb. 4, 2025

By Sandeep Sinha

MUMBAI – Futures contracts of gold rose on the Multi Commodity Exchange of India and COMEX Tuesday on safe-haven demand after China imposed 15% additional tariffs on select imports from the US. The uptake was also due to continued inflows in gold exchange-traded funds.

At 1939 IST, the most-active April GOLD contract on the MCX was up 0.2% at INR 83,487 per 10 grams. The most-active April gold contract on COMEX was up 0.2% at $2,861.42 per ounce. The highest call open interest was at INR 84,000 strike price, indicating a bullish view. The highest put open interest was at INR 80,000 strike for the Feb. 28 contract.

On Monday, gold holdings with the SPDR Gold Trust, the world's largest gold-backed ETF, rose by 0.86 tonne to 865.77 tonnes, the fourth consecutive day of inflows. The fund has a market value of $78.62 billion. On the National Stock Exchange, the total value of gold ETFs traded Tuesday was INR 1.87 billion, down from INR 2.05 billion on Monday.

Gold prices hit a fresh lifetime high of $2,872 an ounce on COMEX Monday and climbed to INR 83,721 per 10 grams on MCX, as Mexican President Claudia Sheinbaum Pardo and US President Donald Trump agreed to delay tariff implementation by a month.

The sentiment Tuesday was also likely weighed down by a rebound in the dollar. The dollar index, which measures the strength of the greenback against a basket of major currencies, rose 0.1% to 108.52 at 1924 IST. A stronger greenback makes dollar-denominated precious commodities more expensive for those holding other currencies, dulling demand. 

"Gold's positive rally took a slight pause as MCX gold traded near INR 83,000 per 10 grams with a minor INR 200 dip. This weakness came as tariff discussions between the US, Canada, and Mexico gained traction," Jateen Trivedi, vice-president and research analyst at LKP Securities, said in a note. Going forward, gold is expected to trade in a range between INR 82,000 and INR 83,500, he said.

Investors will take further cues from the US job openings and labour turnover survey report due later Tuesday. They will also watch out for US January non-farm payrolls data scheduled on Friday.

SILVER contracts also recovered Tuesday, tracking the turnaround in gold. At 1939 IST, the most-active March contract on the MCX was up 1% at INR 95,163 per kg. The same-month contract on COMEX was trading 0.7% higher at $32.76 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.

Until 1939 IST, the April and June gold contracts recorded turnovers of INR 39.61 billion and INR 2.67 billion, respectively. The March and May silver contracts saw turnovers of INR 24.69 billion and INR 3.97 billion, respectively.

The spot gold-silver ratio, also known as the Mint ratio, fell to 89.06 on Tuesday, indicating that silver had outperformed gold. The ratio was at 89.34 on Monday. 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 82,871–INR 83,472 per 10 gm

--COMEX gold seen at $2,810.0–$2,874.0 an ounce

--MCX silver seen at INR 93,944-INR 94,742 per kg

--COMEX silver seen at $31.94-$32.80 an ounce

End

US$1 = INR 87.07

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

Edited by Nishant Maher

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