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Informist, Wednesday, Apr. 30, 2025

By Sandeep Sinha

MUMBAI – Futures contracts of gold on the Multi Commodity Exchange of India and the COMEX extended their decline for the second straight day because easing US tariff concerns reduced safe-haven demand for the metal. Sentiment was further hurt by strength in the dollar, weak physical demand from top consumers India and China, and institutional and high net worth investors offloading stocks.

"The sharp decline (in gold) follows renewed optimism over global trade deals, particularly between the US and China, which has significantly reduced safe-haven demand for gold," Jateen Trivedi, vice-president and research analyst at LKP Securities, said in a note. "After a stellar 14% rally in April driven by tariff tensions, gold now faces the possibility of a 4-5% correction as the market begins to price in the easing of trade risks. A confirmed US-China deal could be a major bearish trigger in the near term."

At 1815 IST, the dollar index, which measures the strength of the greenback against a basket of major currencies, was up 0.2% at 99.43. A stronger dollar makes dollar-denominated precious commodities more expensive for those holding other currencies, dulling demand.

The 'Gold Trend Report' released early Wednesday by the World Gold Council showed jewellery demand in top consumers India was down 25% on year to 71.4 tonnes, and in China it fell 32% on year to 125.3 tonnes as rising prices impact affordability. Institutional and high net worth investors, who were the biggest drivers of gold in physical market last year, offloaded 104 tonnes in the March quarter, the WGC said.

At 1815 IST, the most active June GOLD contract on the MCX was down 1.4% at INR 94,322 per 10 grams. The most active June gold contract on the COMEX was 0.9% lower at $3,305.10 per ounce. The highest call open interest in gold was at the INR 95,000 strike, indicating a bullish view. The highest put open interest was at the INR 93,000-INR 92,000 strikes for the Apr. 30 contract.

The price of 24-carat gold in Mumbai was INR 94,361 per 10 grams, along with 3% goods and services tax, while 10 grams of 22-carat gold was priced at INR 86,435, plus GST. The price of 18-carat gold was quoted at INR 70,771, plus GST, in the retail market.

However, the downside in the precious metal was limited due to inflows in gold exchange-traded funds. On Tuesday, gold holdings with the SPDR Gold Trust, the world's largest gold-backed exchange traded fund, rose by 0.86 tonne to 947.13 tonnes. The fund has a market value of $100.61 billion. On the National Stock Exchange, the total value of gold ETFs traded on Wednesday was INR 3.19 billion, up from INR 2.74 billion on Tuesday.

SILVER contracts tumbled, taking cues from COMEX, and a sell-off in gold and industrial metals. At 1820 IST, the most active May contract on the MCX was down 2.8% at INR 94,200 per kg, while the same-month contract on COMEX was 2.3% lower at $32.55 per ounce.

The MCX Bulldex, which tracks the real-time performance of gold and silver futures on the MCX, was down 451 points at 21576 points. The turnover for the June and August gold contracts stood at INR 126.99 billion and INR 12.19 billion, respectively. The May and July silver contracts saw turnovers of INR 1.26 billion and INR 45.73 billion, respectively.

The spot gold-silver ratio, also known as the Mint ratio, rose to 101.51 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 100.73 on Tuesday.

Outlook for rest of the session:

--MCX gold seen at INR 93,402–INR 94,768 per 10 gm

--COMEX gold seen at $3,282.0–$3,354.90 an ounce

--MCX silver seen at INR 93,402-INR 94,700 per kg

--COMEX silver seen at $32.40-$33.07 an ounce

End

US$1 = INR 84.48

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

Edited by Avishek Dutta

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