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Informist, Monday, Apr. 21, 2025

By Sandeep Sinha

MUMBAI – Futures contracts of gold rose on the Multi Commodity Exchange of India and the COMEX as concerns about the global economic slowdown lifted the metal's safe-haven demand. The positive sentiment was further aided by persistent weakness in the dollar.

US President Donald Trump's tariffs and trade policy uncertainties have unsettled global markets, leading investors towards gold.

"The rally is largely driven by renewed uncertainty surrounding the US monetary policy after President Donald Trump unveiled plans to overhaul the Federal Reserve. The criticism of the Federal Reserve by President Donald Trump has shaken investor confidence, pushing the dollar sharply lower and catapulting safe-haven gold to a record high," N.S. Ramaswamy, head of commodities at Ventura Securities, said.

At 1835 IST, the most-active June GOLD contract on the MCX was up 2.1% at INR 97,233 per 10 grams, after touching a life high of INR 97,240 per 10 grams earlier Monday. The most-active June gold contract on the COMEX was 3% higher at $3,429.50 per ounce. The contract hit a fresh all-time high of $3,433.70 per ounce during the day.

The highest call open interest on gold was at the INR 98,000 strike, indicating a bullish view. The highest put open interest was at the INR 95,000-INR 93,000 strikes for the Apr. 30 contract.

"The (gold) rally is being supported by escalating tariff tensions, concerns over the US economic outlook, and the looming US debt crisis. Continued buying from China, global central banks, and institutional investors has added momentum to the bullish sentiment," Jateen Trivedi, vice-president and research analyst at LKP Securities, said in a note.

At 1835 IST, the dollar index, which measures the strength of the greenback against a basket of major currencies, was down 0.8% at 98.13. A weaker greenback makes dollar-denominated commodities cheaper for those holding other currencies, thus improving demand.

SILVER contracts traded higher, taking cues from COMEX, and tracking the firm trends in gold and industrial metals. At 1835 IST, the most-active May contract on the MCX was up 1.3% at INR 96,243 per kg. The same-month contract on the COMEX was 1.5% higher at $32.29 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 95,000 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 432 points at 22240. The June and August gold contracts on the MCX recorded turnovers of INR 72.38 billion and INR 5.31 billion, respectively. The May and July silver contracts saw turnovers of INR 18.30 billion and INR 5.27 billion, respectively.

The spot gold-silver ratio, also known as the Mint ratio, rose to 103.26 on Monday, indicating that gold had outperformed silver. The ratio measures the ounces of silver required to buy an ounce of gold. The ratio was 101.52 on Thursday.

Outlook for the rest of the session:

--MCX gold seen at INR 96,062–INR 97,348 per 10 gm

--COMEX gold seen at $3,300.0–$3,500.0 an ounce

--MCX silver seen at INR 95,700-INR 96,600 per kg

--COMEX silver seen at $32.12-$33.34 an ounce

End

US$1 = INR 85.13

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

Edited by Saji George Titus

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