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Informist, Monday, Feb. 24, 2025

By Sandeep Sinha

MUMBAI – Futures contracts of gold rose on the Multi Commodity Exchange of India and COMEX because of persistent inflows in gold exchange-traded funds. The sentiment in the yellow metal was further boosted by geopolitical and trade tensions and weaker-than-expected US economic data.

On Friday, GOLD holdings with the SPDR Gold Trust, the world's largest gold-backed ETF, saw a one-day inflow of 20.66 tonnes, the highest since Jan. 21, 2022. The fund's holding surged above 900 tonnes for the first time since Aug. 10, 2023, to reach 904.38 tonnes. The fund has a market value of $85.29 billion.

The US Composite Purchasing Managers' Index came in at 50.4 in February from 52.7 in January, according to a report published by S&P Global. The University of Michigan Consumer Sentiment Index slipped to 64.7 in February from 71.1 in January, raising fears of slowing growth in the world largest economy.

"Gold recorded its eighth weekly advance as geopolitical and trade tensions boost haven demand," Daniel Hynes, senior commodity strategist at ANZ Research, said in a note. The precious metal gained on fears that the US could unwind support for Ukraine, he said.

At 1828 IST, the most active April gold contract on the MCX was up 0.3% at INR 86,300 per 10 grams. The most active April gold contract on COMEX was also up 0.3% at $2,962.20 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 85,000 strike for the Feb. 28 contract.

"Gold prices are expected to stay afloat due to continued global uncertainties. Trajectory of dollar index and US dollar will be key to gold prices this week," Colin Shah, managing director, Kama Jewelry, said in an email note. "With gold prices witnessing continuous hike, there is a possibility of near-term profit taking. However, mid- to long-term bullishness momentum could also be seen. We anticipate gold prices to scale levels of $3,000 in mid term."

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 1828 IST, the dollar index, which measures the strength of the greenback against a basket of major currencies, was up 0.2% at 106.66.

SILVER contracts fell, taking cues from COMEX, and a weak trend in industrial metals. At 1828 IST, the most-active March contract on the MCX was down 0.3% at INR 95,907 per kg. The same-month contract on COMEX was down 0.3% at $32.90 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 60 points at 20574 points. The April and June gold contracts on the MCX recorded turnovers of INR 29.47 billion and INR 3.16 billion, respectively. The March and May silver contracts saw a turnover of INR 16.18 billion and INR 8.57 billion, respectively.

The spot gold-silver ratio, also known as the Mint ratio, rose to 90.51 Monday, indicating that gold had outperformed silver. The ratio measures the ounces of silver required to buy an ounce of gold. The ratio was 90.37 on Friday.

Outlook for the rest of the session:

--MCX gold seen at INR 85,938–INR 86,759 per 10 gm

--COMEX gold seen at $2,931.57–$2,982.73 an ounce

--MCX silver seen at INR 95,377-INR 96,433 per kg

--COMEX silver seen at $32.65-$33.63 an ounce

End

US$1 = INR 86.69

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

Edited by Rajeev Pai

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