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Informist, Wednesday, Apr. 9, 2025

By Sandeep Sinha

MUMBAI – Futures contracts of gold rose on the Multi Commodity Exchange of India and the COMEX on Wednesday as the escalation in global trade war boosted the yellow metal's safe-haven demand. The positive sentiment was further aided by weakness in the dollar and continued inflows into gold exchange-traded funds.

China raised import tariffs on US goods to 84% Wednesday in a tit-for-tat response to a US tariff of 104%, which came into effect earlier in the day. "The pushback from Beijing sets the scene for further escalation between the two biggest economies in the world," Daniel Hynes, senior commodity strategist at ANZ Research, said in a note.

"A weaker dollar, growing expectations of US rate cuts, possibly as early as May and a sell-off from US Treasuries further boosted gold's appeal. Investor anxiety was evident as markets braced for recession risks, while gold-backed ETFs posted their strongest quarterly inflow in three years, signalling strong institutional interest," Kotak Securities said in a report.

At 1830 IST, the dollar index, which measures the strength of the greenback against a basket of major currencies, was down 0.8% at 102.05. A weaker greenback makes dollar-denominated commodities cheaper for those holding other currencies, thus improving demand.

The inflows in global gold exchange-traded funds rose by 92 tonnes to 3,445.3 tonnes in March, the fourth successive month of positive flow, the World Gold Council's latest data showed.

At 1830 IST, the most-active June GOLD contract on the MCX was up 2.3% at INR 89,657 per 10 grams. The most-active June gold contract on the COMEX was 2.4% higher at $3,063.20 per ounce. The highest call open interest was at the INR 90,000-INR 95,000 strikes, indicating a bullish view. The highest put open interest was at the INR 88,000-INR 87,000 strikes for the Apr. 30 contract.

SILVER contracts traded higher, taking cues from COMEX, and tracking the firm trend in gold. At 1830 IST, the most-active May contract on the MCX was up 1.7% at INR 90,254 per kg. The same-month contract on the COMEX was 1.8% higher at $30.23 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 the INR 90,000 strike 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 420 points at 206480 points. The June and August gold contracts on the MCX recorded turnovers of INR 111.91 billion and INR 11.41 billion, respectively. The May and July silver contracts saw turnovers of INR 42.93 billion and INR 7.66 billion, respectively.

The spot gold-silver ratio, also known as the Mint ratio, rose to 100.66 on Wednesday, indicating that gold had outperformed silver. The ratio measures the ounces of silver required to buy an ounce of gold. The ratio was 100.0 on Tuesday.

Outlook for the rest of the session:

--MCX gold seen at INR 88,863–INR 90,137 per 10 gm

--COMEX gold seen at $3,027.93–$3,077.23 an ounce

--MCX silver seen at INR 89,076-INR 91,350 per kg

--COMEX silver seen at $29.95-$30.80 an ounce

End

US$1 = INR 86.69

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

Edited by Tanima Banerjee

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