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Informist, Monday, Mar. 24, 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. However, gold contracts on the COMEX traded in the green because of a weak dollar as renewed geopolitical tensions in West Asia boosted the safe-haven appeal of the precious metal.

The rupee settled at a near three-month high of 85.6350 a dollar, recouping almost all of its losses in 2025. When the rupee appreciates against the dollar, gold prices adjust in the domestic market as it is priced in rupee terms. The rupee appreciation against the dollar will also make gold imports cheaper for Indian buyers, increasing the supply.

At 1733 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was down 0.1% at 103.98. A weaker greenback makes dollar-denominated commodities expensive for those holding other currencies, aiding demand.

Meanwhile, tensions rose in West Asia following the resumption of Israeli attacks on Hamas in the Gaza Strip. The US has announced despatching another aircraft carrier group to West Asia. 

At 1737 IST, the most-active April GOLD contract on the MCX was down 0.1% at INR 87,723 per 10 grams. The most-active April gold contract on the COMEX was up 0.3% at $3,030.5 per ounce.

"Gold is benefiting from a softer US dollar, rising central bank demand, and fears of a potential universal US tariff," Dow Jones quoted an analyst at Deutsche Bank as saying. China, in particular, is driving the bigger share of central bank demand at 48%," the analyst said.

The People's Bank of China added 5 tonnes of gold to its reserves in February, the fourth consecutive month of gold purchase, according to a report by the World Gold Council. Gold reserves with the Chinese central bank climbed to 2,290 tonnes as of the end of February, the highest on record, accounting for 5.9% of the country's total foreign exchange reserves.

SILVER contracts rose on the MCX, tracking a rise in contracts on the COMEX because of a weak dollar. At 1749 IST, the most-active May silver contract on the MCX was up 0.1% at INR 97,974 per kilogram. The same-month contract on the COMEX was 0.5% higher at $33.64 per ounce.

For further cues, market participants await the US flash manufacturing purchasing managers' index due later in the day.

Outlook for the rest of the session:

--MCX gold seen at INR 86,439–INR 88,861 per 10 gm

--COMEX gold seen at $2,979.1–$3,071.0 an ounce

--MCX silver seen at INR 95,703-INR 100,199 per kg

--COMEX silver seen at $32.24-$34.07 an ounce

End

US$1 = INR 85.63

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

Edited by Saji George Titus

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