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Informist, Monday, Mar. 3, 2025

By Sandeep Sinha

MUMBAI – Futures contracts of gold rose on the Multi Commodity Exchange of India and COMEX as investors sought the safety of the precious metal because of escalating geopolitical tensions. The sentiment for precious metals was lifted further by a weaker dollar and short-covering of positions by traders.

"The fresh upside (in gold) comes as global uncertainty persists, with tensions between US and Ukraine leaders over deal negotiations. Ongoing tariff concerns and dollar volatility continue to support gold as a safe-haven asset," Jateen Trivedi, vice-president and research analyst at LKP Securities, said in a note.

The dollar index, which measures the strength of the greenback against a basket of major currencies, was down 0.4% at 106.92 at 1800 IST. A weaker greenback makes dollar-denominated commodities cheaper for those holding other currencies, thus improving demand for precious metals.

At 1800 IST, the most active April gold contract on the MCX was up 0.9% at INR 84,950 per 10 grams. The most active April gold contract on COMEX was 1.3% higher at $2,913.0 per ounce. The highest call open interest was at INR 85,000-INR 86,000 strike prices, indicating a bullish view. The highest put open interest was at INR 84,000-INR 80,000 strikes for the Mar. 26 contract.

However, outflow from gold exchange-traded funds limited the upside in gold prices. On Friday, gold holdings with SPDR Gold Trust, the world's largest gold-backed ETF, fell by 1.72 tonnes to 904.38 tonnes. The fund has a market value of $82.39 billion. On the National Stock Exchange, the total value of gold ETFs traded Monday was INR 1.81 billion, down from INR 3.51 billion Friday.

Trivedi said that any positive developments in the Russia-Ukraine relations or global trade tariff situation could pressure gold prices.

For further cues, investors will focus on data on the US final manufacturing purchasing managers' index and the Institute of Supply Management manufacturing purchasing managers' index due later in the day.

SILVER contracts rose, taking cues from COMEX and from firm trends in gold and industrial metals. At 1800 IST, the most-active May contract on the MCX was up 1.5% at INR 95,695 per kg. The same-month contract on COMEX was 2.1% higher at $32.15 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 strike 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 up 151 points at 20227 points. The April and June gold contracts on the MCX recorded turnovers of INR 31.25 billion and INR 5.04 billion, respectively. The May and July silver contracts saw turnovers of INR 15.36 billion and INR 549.38 million, respectively.

The spot gold-silver ratio, also known as the Mint ratio, fell to 91.15 on Monday, indicating that gold had outperformed silver. The ratio measures the ounces of silver required to buy an ounce of gold. The ratio was 91.67 on Friday.

Outlook for the rest of the session:

--MCX gold seen at INR 84,452–INR 85,363 per 10 gm

--COMEX gold seen at $2,894.23–$2,946.90 an ounce

--MCX silver seen at INR 94,260-INR 95,700 per kg

--COMEX silver seen at $31.98-$32.23 an ounce

End

US$1 = INR 87.37

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

Edited by Tanima Banerjee

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