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Informist, Wednesday, Mar. 12, 2025

By Sandeep Sinha

MUMBAI – Futures contracts of gold rose on the COMEX due to the expectation of an interest rate cut by the US Federal Reserve as US inflation came in lower than anticipated. The positive sentiment for the precious metal was also boosted by fresh inflows in gold exchange-traded funds. On the Multi Commodity Exchange of India, gold prices traded marginally lower due to profit-taking by traders.

The US consumer price index rose 2.8% on year in February, down from 3.0% in January, according to the US Bureau of Labor Statistics data on Wednesday. The index was lower than analysts' expectation of 2.9%. The core consumer price index rose 3.1% on year last month.

On Tuesday, GOLD holdings with SPDR Gold Trust, the world's largest gold-backed ETF, fell by 3.45 tonnes to 895.20 tonnes. The fund has a market value of $83.92 billion. On the National Stock Exchange, the total value of gold ETFs traded on Wednesday was INR 2.27 billion, up from INR 1.08 billion on Tuesday.

However, the upside was capped by strength in the dollar, which makes commodities priced in the greenback expensive for those holding other currencies. At 1835 IST, the dollar index, which measures the strength of the greenback against a basket of major currencies, was up 0.4% at 103.77.

At 1835 IST, the most-active April gold contract on the MCX was down 0.1% at INR 86,045 per 10 grams. The most-active April gold contract on COMEX was up 0.1% at $2,922.70 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.

SILVER contracts rose taking cues from COMEX and a firm trend in industrial metals. At 1835 IST, the most-active May contract on the MCX was up 1% at INR 99,099 per kg. The same-month contract on COMEX was 1.3% higher at $33.58 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 54 points at 20631 points. The April and June gold contracts on the MCX recorded turnovers of INR 31.73 billion and INR 4.96 billion, respectively. The May and July silver contracts saw turnovers of INR 23.52 billion and INR 1.03 billion, respectively.

The spot gold-silver ratio, also known as the Mint ratio, fell to 88.33 on Wednesday, indicating that silver had outperformed gold. The ratio measures the ounces of silver required to buy an ounce of gold. The ratio was 88.52 on Tuesday.

Outlook for the rest of the session:

--MCX gold seen at INR 85,758–INR 86,342 per 10 gm

--COMEX gold seen at $2,885.0–$2,935.0 an ounce

--MCX silver seen at INR 98,209-INR 100,877 per kg

--COMEX silver seen at $33.01-$33.81 an ounce

End

US$1 = INR 87.21

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

Edited by Ashish Shirke

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