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Informist, Wednesday, Feb. 19, 2025

By Sandeep Sinha

MUMBAI – Futures contracts of gold rose marginally on the Multi Commodity Exchange of India and the COMEX as the risk of a full-fledged trade war boosted the metal's safe-haven demand. Sentiment was also boosted by inflows in gold exchange-traded funds and major investment banks raising their forecasts.

In a note to clients, Goldman Sachs Tuesday increased their year-end target for gold to $3,100 per ounce because of central banks' buying and inflows into exchange-traded funds.

On Tuesday, gold holdings with the SPDR Gold Trust, the world's largest gold-backed ETF, rose by 6.88 tonnes to 869.94 tonnes. The fund has a market value of $81.85 billion. On the National Stock Exchange, the total value of gold ETFs traded on Wednesday was INR 1.40 billion.

At 2000 IST, the most-active April GOLD contract on the MCX was up 0.1% at INR 86,193 per 10 grams. The most-active April gold contract on COMEX was up 0.1% at $2,951.0 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 strikes for the Feb. 28 contract.

However, the upside in the yellow metal was restricted by a strong dollar, which makes dollar-denominated commodities expensive for those holding other currencies. At 2000 IST, the Dollar Index, which measures the strength of the greenback against a basket of major currencies, was up 0.1% at 107.12.

Investors will take cues from the US Federal Open Market Committee January meeting minutes to be released early Thursday.

SILVER contracts fell taking cues from COMEX and a firm dollar. At 2001 IST, the most-active March contract on the MCX was down 0.4% at INR 96,490 per kilogram. The same-month contract on the COMEX was down 0.8% at $33.10 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 110 points at 20608 points. The April and June gold contracts on the MCX recorded turnovers of INR 55.67 billion and INR 2.17 billion, respectively. The March and May silver contracts saw a turnover of INR 19.52 billion and INR 5.59 billion, respectively.

The spot gold-silver ratio, also known as the Mint ratio, rose marginally to 89.89 on Wednesday, indicating that gold outperformed silver. The ratio measures the ounces of silver required to buy an ounce of gold. The ratio was 89.81 on Tuesday.

Outlook for the rest of the session:

--MCX gold seen at INR 85,495–INR 86,435 per 10 gm

--COMEX gold seen at $2,932.80–$2,978.10 an ounce

--MCX silver seen at INR 96,027-INR 97,322 per kg

--COMEX silver seen at $32.76-$33.77 an ounce

End

US$1 = INR 86.95

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

Edited by Ashish Shirke

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