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Informist, Wednesday, Apr. 23, 2025

By Sandeep Sinha

MUMBAI – Futures contracts of gold fell on the Multi Commodity Exchange of India and the COMEX as easing US-China trade tensions and diminished concerns over the Federal Reserve's independence reduced safe-haven demand. The sentiment was further impacted by profit-taking, outflows from gold exchange-traded funds, and money managers trimming long positions.

US Treasury Secretary Scott Bessent said on Tuesday that the current tariff situation is "unsustainable" and anticipates a near-term de-escalation in China-US trade tensions, Reuters reported. His remarks prompted investors to book profits in gold and fuelled a rally in riskier assets.

On Tuesday, gold holdings with the SPDR Gold Trust, the world's largest gold-backed ETF, fell 11.47 tonnes to 947.70 tonnes. The fund has a market value of $104.59 billion. On the National Stock Exchange, the total value of gold ETFs traded on Wednesday was INR 5.75 billion, up from INR 5.47 billion on Tuesday.

Money managers reduced their net long position in COMEX gold by 1,546 lots to 136,919 lots as of Apr. 15, indicating a weak sentiment for the yellow metal, according to Commodity Futures Trading Commission data.

At 1715 IST, the most-active June GOLD contract on the MCX was down 1.4% at INR 96,024 per 10 grams. The most-active June gold contract on the COMEX was 2.3% lower at $3,338.40 per ounce. The highest call open interest on gold was at the INR 100,000 strike, indicating a bullish view. The highest put open interest was at the INR 90,000 strike for the Apr. 30 contract.

However, the downside in the yellow metal was cushioned by weakness in the dollar, which makes dollar-denominated commodities cheaper for those holding other currencies. At 1715 IST, the dollar index, which measures the strength of the greenback against a basket of major currencies, was down 0.6% at 99.06.

SILVER contracts traded higher, taking cues from COMEX, and tracking firm trends in industrial metals. At 1715 IST, the most-active May contract on the MCX rose 0.5% to INR 96,353 per kg, while the same-month contract on COMEX was up 0.2% at $32.96 per ounce. On the options front, the highest call open interest was seen at the INR 100,000 strike price, and the highest put open interest was at the INR 95,000 strike for the contract expiry Thursday.

The MCX Bulldex, which tracks the real-time performance of gold and silver futures on the MCX, was down 292 points at 22072. The turnover for the June and August gold contracts stood at INR 106.01 billion and INR 9.99 billion, respectively. The May and July silver contracts saw turnovers of INR 18.94 billion and INR 10.94 billion, respectively.

The spot gold-silver ratio, also known as the Mint ratio, fell to 101.13 on Wednesday, indicating that gold had underperformed silver. The ratio measures the ounces of silver required to buy an ounce of gold. The ratio was 103.99 on Tuesday.

Outlook for the rest of the session:

--MCX gold seen at INR 94,960–INR 97,754 per 10 gm

--COMEX gold seen at $3,296.20–$3,427.0 an ounce

--MCX silver seen at INR 94,716-INR 97,754 per kg

--COMEX silver seen at $32.11-$33.55 an ounce

End

US$1 = INR 85.42

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

Edited by Subhojit Sarkar

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