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Informist, Thursday, Feb. 27, 2025

By Sandeep Sinha

MUMBAI – Futures contracts of gold fell on the Multi Commodity Exchange of India and COMEX because of the strength in the dollar. The sentiment was also dampened by outflows from gold exchange-traded funds and profit-taking.

At 1810 IST, the dollar index, which measures the strength of the greenback against a basket of major currencies, was up 0.1% at 106.62. A stronger dollar makes dollar-denominated precious commodities more expensive for those holding other currencies, dulling demand.

On Wednesday, GOLD holdings with the SPDR Gold Trust, the world's largest gold-backed ETF, fell by 0.86 tonnes to 906.96 tonnes, the first outflow after six days of inflows. The fund has a market value of $84.57 billion. On the National Stock Exchange, the total value of gold ETFs traded Wednesday was INR 3.14 billion.

"Gold prices traded weak as a sell-off was witnessed below $2,915 an oz, pushing prices toward $2,880 an oz on COMEX. A similar trend was reflected in MCX, where gold saw a decline of INR 800, touching INR 85,000 per 10 grams," Jateen Trivedi, vice-president and research analyst at LKP Securities, said in a note. "Further weakness may emerge if COMEX gold falls below $2,875 and MCX gold breaches INR 84,800," he said.

At 1810 IST, the most active April gold contract on the MCX was down 0.9% at INR 85,176 per 10 grams. The most active April gold contract on COMEX was 1.1% lower at $2,900.0 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 85,000-INR 84,000 strike for the Feb. 28 contract.

For further cues, investors will now shift their focus towards data on US GDP, weekly jobless claims, and pending home sales, due later Thursday. They will also watch for the US Core Personal Consumption Expenditures Price Index, due to be released Friday, the preferred inflation gauge of the US Federal Reserve.

SILVER contracts fell, taking cues from COMEX and the weaker trend in gold. At 1810 IST, the most-active March contract on the MCX was down 0.1% at INR 94,520 per kg. The same-month contract on COMEX was down 0.5% at $32.26 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 95,000-INR 90,000 strikes for the Apr. 24 expiry contract.

The MCX Bulldex, an index that tracks the real-time performance of gold and silver futures on the MCX, was down 66 points at 20315 points. The April and June gold contracts on the MCX recorded turnovers of INR 55.73 billion and INR 5.03 billion, respectively. The March and May silver contracts saw a turnover of INR 22.36 billion and INR 8.80 billion, respectively.

The spot gold-silver ratio, also known as the Mint ratio, fell to 90.78 on Friday, indicating that gold had underperformed silver. The ratio measures the ounces of silver required to buy an ounce of gold. The ratio was 91.84 on Wednesday.

Outlook for the rest of the session:

--MCX gold seen at INR 84,856–INR 85,544 per 10 gm

--COMEX gold seen at $2,886.97–$2,925.67 an ounce

--MCX silver seen at INR 93,823-INR 94,977 per kg

--COMEX silver seen at $31.90-$32.74 an ounce

End

US$1 = INR 87.20

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

Edited by Rajeev Pai

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