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Informist, Wednesday, Mar. 26, 2025

By Ashutosh Pati

MUMBAI – Futures contracts of gold on the Multi Commodity Exchange of India and the COMEX rose Wednesday as weak economic data from the US raised concerns about inflation and boosted safe-haven demand, analysts said. Market sentiment was also lifted by continued inflows into gold-exchange traded funds.

The Conference Board said US consumer confidence fell to 92.9 in March, lower than the expected 94.0 by analysts in a survey by Reuters poll. "Growing economic worries among consumers and businesses over the impact of President Trump's policies are buoying gold prices," Dow Jones quoted Samer Hasn, senior market analyst at XS.com, as saying in a note. "Tuesday's consumer confidence report came in below expectations, reflecting inflation worries, Trump-driven policy uncertainty and growing pessimism about interest rate cuts," Hasn added.

At 1907 IST, the most-active April GOLD contract on the MCX was up 0.1% at INR 87,645 per 10 grams. The most-active April gold contract on the COMEX was up 0.2% at $3,031 per ounce. Uncertainty over the announcement of reciprocal tariffs by the US on Apr. 2 and geopolitical tensions in West Asia also supported prices of the precious metal.

"Gold edged higher as flows into gold-backed exchange traded funds aided the tightness in the physical market. About 154 tonnes have been added to such funds this year, according to Bloomberg data," Daniel Hynes, senior commodity strategist at ANZ Research, said in a note. 

However, the gains in gold prices could be limited by a firm dollar, which makes commodities priced in the greenback expensive for buyers holding other currencies, denting demand. At 1910 IST, the dollar index, which measures the strength in the greenback against a basket of six major currencies, was up 0.2% at 104.44.

Meanwhile, the White House said Tuesday that Russia and Ukraine had seperately agreed to a ceasefire in the Black Sea, which is also likely to restrict the upside in gold prices. The US said that the two countries agreed to halve military activities over the Black Sea, while ensuring safe navigation.

SILVER contracts rose on the MCX and COMEX, tracking a rise in gold contracts. At 1913 IST, the most-active May silver contract on the MCX was up 0.6% at INR 99,718 per kilogram. The same-month contract on the COMEX was 0.5% higher at $34.33 per ounce.

For further cues, investors are waiting for the US GDP data, due Thursday, and the Personal Consumption Expenditures data, due Friday.

Outlook for the rest of the session:

--MCX gold seen at INR 86,428–INR 88,692 per 10 gm

--COMEX gold seen at $2,974.7–$3,061.9 an ounce

--MCX silver seen at INR 97,172-INR 101,636 per kg

--COMEX silver seen at $32.86-$34.59 an ounce 

End

US$1 = INR 85.70

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

Edited by Tanima Banerjee

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