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Informist, Tuesday, Mar. 11, 2025

By Sandeep Sinha

MUMBAI – Futures contracts of gold rose on the Multi Commodity Exchange of India and the COMEX because of weakness in the dollar and short-covering after two days of fall. The safe-haven appeal of the yellow metal also got a boost from concerns that an escalating trade war may lead to a global economic slowdown.

At 1815 IST, the dollar index, which measures the strength of the greenback against a basket of major currencies, was down 0.5% at 103.40. A weaker greenback makes dollar-denominated commodities cheaper for those holding other currencies, thus improving demand.

"A weaker US dollar and falling US bond yields are providing a tailwind, as is the increasing uncertainty surrounding US President Trump's tariff policy, which is now also clearly putting the brakes on US economic growth and the US equity markets," Carsten Fritsch, commodity analyst at Commerzbank said in a note to client.

At 1815 IST, the most active April gold contract on the MCX was up 0.7% at INR 86,027 per 10 grams. The most active April gold contract on COMEX was 0.8% higher at $2,921.10 per ounce. The highest call open interest was at INR 90,000 strike price, indicating a bullish view. The highest put open interest was at INR 85,000-INR 84,000 strikes for the Mar. 26 contract.

However, outflow from gold exchange-traded funds limited the upside in gold prices. On Monday, gold holdings with SPDR Gold Trust, the world's largest gold-backed ETF, fell by 2.59 tonnes to 891.75 tonnes. The fund has a market value of $83.40 billion. On the National Stock Exchange, the total value of gold ETFs traded on Tuesday was INR 1.08 billion, down from INR 1.39 billion on Monday.

Gold price is already trading at a very high level due to the sharp rise since the start of the year, which limits the upside potential, Fritsch said. The German bank also remains sceptical that the gold price can still rise significantly.

For further cues, investors will focus on data on the US Job Openings and Labour Turnover Survey report due later in the day.

SILVER contracts rose, taking cues from COMEX, and firm trends in gold and industrial metals. At 1815 IST, the most-active May contract on the MCX was up 1.2% at INR 97,595 per kg. The same-month contract on COMEX was 1.4% higher at $32.99 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 up 89 points at 20503 points. The April and June gold contracts on the MCX recorded turnovers of INR 35.44 billion and INR 10.74 billion, respectively. The May and July silver contracts saw turnovers of INR 18.75 billion and INR 651.07 million, respectively.

The spot gold-silver ratio, also known as the Mint ratio, rose to 89.64 on Tuesday, indicating that gold had outperformed silver. The ratio measures the ounces of silver required to buy an ounce of gold. The ratio was 89.32 on Monday.

Outlook for the rest of the session:

--MCX gold seen at INR 85,571–INR 86,377 per 10 gm

--COMEX gold seen at $2,890.0–$2,942.83 an ounce

--MCX silver seen at INR 96,890-INR 98,001 per kg

--COMEX silver seen at $32.63-$33.49 an ounce

End

US$1 = INR 87.21

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

Edited by Deepshikha Bhardwaj

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