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Informist, Friday, Mar. 21, 2025

By Ashutosh Pati

MUMBAI – Futures contracts of gold edged lower on the Multi Commodity Exchange of India because of a sharp rise in the rupee against the dollar. On the COMEX, prices of the precious metal were trading lower as traders booked profits after prices hit record high in the previous session. However, the fall in gold prices was limited as renewed geopolitical tensions in West Asia boosted the safe-haven appeal of the precious metal.

The rupee settled at 85.97 a dollar, logging its best single day gain in over five weeks as foreign banks persistently sold dollars for foreign fund inflows and exporters. When the rupee appreciates against the dollar, it makes imports cheaper for Indian buyers, which weighs on gold prices as supply rises.

At 1813 IST, the most-active April GOLD contract on the MCX was down 0.5% at INR 88,233 per 10 grams. The most-active April gold contract on the COMEX was down 0.1% at $3,041 per ounce.

"Gold prices may continue to consolidate in the near term," Dow Jones quoted Kelly Chung, chief investment officer, multi assets, at Value Partners, as saying. "Investors have been buying gold as a hedge against uncertainties regarding Trump's policies and central banks are buying gold to lower their dependence on the US dollar. In the long term, heightened geopolitical risks will continue to support the precious metal's outlook," Chung added.

Hamas delivered its first response to three days of Israeli assault on the Gaza Strip, launching a volley of rockets at Tel Aviv on Thursday. Israeli airstrikes had pounded the Gaza strip on Tuesday, killing over 400 people, breaking the ceasefire that was in effect since mid-January.

SILVER contracts fell on the MCX tracking a fall in contracts on the COMEX because of a firm dollar and weakness in industrial metals. At 1818 IST, the Dollar Index, which measures the strength of the greenback against a basket of six major currencies, was up 0.1% at 103.91. A stronger greenback makes dollar-denominated commodities expensive for those holding other currencies, denting demand.

At 1818 IST, the most-active May silver contract on the MCX was down 1% at INR 98,450 per kilogram. The same-month contract on the COMEX was 0.8% lower at $33.72 per ounce.

Outlook for the rest of the session:

--MCX gold seen at INR 87,029–INR 89,389 per 10 gm

--COMEX gold seen at $2,987.1–$3,077.6 an ounce

--MCX silver seen at INR 95,826-INR 100,612 per kg

--COMEX silver seen at $32.15-$34.03 an ounce

End

US$1 = INR 85.97

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

Edited by Ashish Shirke

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