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Informist, Friday, Feb. 7, 2025

By Sandeep Sinha

MUMBAI – Futures contracts of gold on the Multi Commodity Exchange of India and the COMEX traded higher ahead of the US non-farm payroll data later in the day. Analysts polled by Dow Jones estimated the payrolls to come in at 214,000 in January from 207,000 in December.

The sentiment for the yellow metal was also lifted by buying by the People's Bank of China, geopolitical tensions, and economic uncertainties fuelled safe-haven demand. China's central bank bought 4.97 tonnes in January, the third consecutive month of purchases.

The stock of gold in COMEX has risen to 1,053.18 tonnes as of Feb. 5 from 681.44 tonnes on Dec. 31, the highest level since 2022. "Tariff fears and a profitable arbitrage – after gold prices on COMEX moved to a premium over international prices in December – have caused a rush of gold to fly into New York. Gold's exports to the US from Europe's main refining hub in Switzerland have also jumped to the highest level since Russia's invasion of Ukraine," ING Economics said in a note.

At 1743 IST, the most active April GOLD contract on the MCX was up 0.3% at INR 84,695 per 10 grams. The most active April gold contract on COMEX was up 0.5% at $2,889.70 per ounce. The highest call open interest was at INR 86,000-INR 87,000 strike prices, indicating a bullish view. The highest put open interest was at INR 82,000-INR 80,000 strike for the Feb. 28 contract.

On Thursday, gold holdings with the SPDR Gold Trust, the world's largest gold-backed ETF, remained steady at 864.19 tonnes. The fund has a market value of $78.85 billion. On the National Stock Exchange, the total value of gold ETFs traded on Friday was INR 2.85 billion, up from INR 3.60 billion on Thursday.

"A sharp rise in lease rates also indicates tension in the physical market. However, we are assuming an exaggeration, although a correction could still be some way off," Barbara Lambrecht, commodity analyst at Commerzbank AG, said in a note to clients.

For further cues, investors will look for the University of Michigan Consumer Sentiment report and inflation expectations later Friday that could influence gold's continued movement.

SILVER contracts traded higher, taking cues from COMEX, and a firm trend in gold and industrial metals. At 1743 IST, the most-active March contract on the MCX was up 0.1% at INR 95,642 per kilogram. The same-month contract on the COMEX was 0.2% higher at $32.70 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 81 points at 20245 points. The April and June gold contracts recorded turnovers of INR 21.01 billion and INR 751.71 million, respectively. The March and May silver contracts saw turnover of INR 93.12 billion and INR 1.32 billion, respectively.

The spot gold-silver ratio, also known as the Mint ratio, fell to 88.89 on Friday, indicating that gold outperformed silver. The ratio measures the ounces of silver required to buy an ounce of gold. The ratio was at 89.46 on Thursday.

Outlook for the rest of the session:

--MCX gold seen at INR 84,387–INR 85,073 per 10 gm

--COMEX gold seen at $2,867.93–$2,906.0 an ounce

--MCX silver seen at INR 95,296-INR 96,444 per kg

--COMEX silver seen at $32.40-$33.20 an ounce

End

US$1 = INR 87.43

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

Edited by Akul Nishant Akhoury

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