India Bullion
Gold prices down on profit-taking, sharp rise in rupee
This story was originally published at 18:49 IST on 11 February 2025
Register to read our real-time news.Informist, Tuesday, Feb. 11, 2025
By Sandeep Sinha
MUMBAI – Futures contracts of gold fell on the Multi Commodity Exchange of India, taking cues on the COMEX, as profit-taking emerged at higher levels. A sharp appreciation in the rupee against the dollar also weighed down the sentiment in the domestic market.
The rupee strengthened for the second-straight day and settled 0.7% higher at 86.83 a dollar after the Reserve Bank of India aggressively sold the greenback to support the domestic currency. A firm rupee makes commodities priced in dollars cheaper for domestic buyers.
At 1751 IST, the most active April GOLD contract on the MCX was down 0.7% at INR 85,260 per 10 grams, after touching a fresh lifetime high of INR 86,360 per 10 gm earlier in the day. The most active April gold contract on COMEX was down 0.3% at $2,926.80 per ounce. The contract hit a new lifetime high of $2,968.5 per ounce earlier Tuesday. The highest call open interest was at INR 86,000-INR 88,000 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.
"The usual influencing factors such as the US dollar and interest rate expectations are not playing a role for the gold price at the moment," Carsten Fritsch, commodity analyst at Commerzbank said in a note to clients. "The potential for correction is increasing day by day," he said.
However, the downside in the precious metal price was limited due to continued inflows in gold exchange-traded funds, rising stocks at COMEX warehouses and safe-haven demand. Global gold exchange-traded funds saw a net addition of 34.5 tonnes in January, the second consecutive month of inflows, the World Gold Council said in a report Monday.
On Monday, gold holdings with the SPDR Gold Trust, the world's largest gold-backed ETF, rose by 2.58 tonnes to 871.08 tonnes. The fund has a market value of $81.31 billion. On the National Stock Exchange, the total value of gold ETFs traded on Tuesday was INR 3.46 billion, down from INR 3.81 billion on Monday. Gold stocks at COMEX warehouses rose by 27.9 tonnes to 1,103.94 tonnes as of Feb. 7, the exchange data showed.
Traders are now focused on Federal Reserve Chair Jerome Powell's testimony and upcoming US inflation data for insights into interest rate adjustments, Kotak Securities said.
SILVER contracts traded lower, taking cues from COMEX, and a weak trend in gold and industrial metals. At 1751 IST, the most-active March contract on the MCX was down 1.4% at INR 93,974 per kilogram. The same-month contract on the COMEX was 1.1% lower at $32.14 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 down 122 points at 20350 points. The April and June gold contracts recorded turnovers of INR 60.59 billion and INR 3.07 billion, respectively. The March and May silver contracts saw turnover of INR 20.97 billion and INR 4.30 billion, respectively.
The spot gold-silver ratio, also known as the Mint ratio, rose to 91.48 on Tuesday, indicating that gold outperformed silver. The ratio measures the ounces of silver required to buy an ounce of gold. The ratio was at 89.99 on Monday.
Outlook for the rest of the session:
--MCX gold seen at INR 84,845–INR 86,067 per 10 gm
--COMEX gold seen at $2,898.43–$2,976.47 an ounce
--MCX silver seen at INR 93,594-INR 94,758 per kg
--COMEX silver seen at $32.08-$32.85 an ounce
End
US$1 = INR 86.83
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Saji George Titus
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