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Informist, Monday, May 5, 2025

By Sandeep Sinha

MUMBAI – Futures contracts of gold rose on the Multi Commodity Exchange of India and the COMEX due to uncertainty relating to trade talks between the US and China, which boosted the safe-haven demand. The positive momentum was further lifted by weakness in the dollar and short-covering by traders after the decline in the past few sessions.

At 1735 IST, the most active June GOLD contract on the MCX was up 2.1% at INR 94,598 per 10 grams. The most active June gold contract on the COMEX was 2.5% higher at $3,324.60 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 May 27 contract.

Also supporting the positive cue in the bullion metal was the news about Israel's new military plan. According to the Associated Press, Israel approved plans Monday to capture the entire Gaza Strip and remain in the Palestinian territory for an unspecified amount of time. The decision, if implemented, will likely raise the possibility of widening conflict in the region.

At 1735 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was down 0.3% at 99.63. A weaker greenback makes dollar-denominated commodities cheaper for those holding other currencies, thus improving demand.

The price of 10 gm 24-carat gold in Mumbai was INR 95,282, along with 3% goods and services tax, while 22-carat 10 gm stood at INR 87,278 plus GST. The price of 18-carat gold was quoted at INR 71,462 plus GST in the retail market.

However, further upside in the yellow metal was restricted due to outflow in gold exchange-traded funds and money managers continuing to reduce their long positions.

On Monday, gold holdings with the SPDR Gold Trust, the world's largest gold-backed ETF, fell by 1.15 tonnes to 944.26 tonnes. The fund has a market value of $98.62 billion. On the National Stock Exchange, the total value of gold ETFs traded on Monday was INR 2.49 billion.

Money managers reduced their net long position in COMEX gold by 9,857 lots to 115,865 as of Apr. 29, indicating weak sentiment for the yellow metal, according to Commodity Futures Trading Commission data.

SILVER contracts rose, taking cues from COMEX, and firm trends in gold and industrial metals. At 1735 IST, the most active July contract on the MCX was up 0.8% at INR 94,788 per kg, while the same-month contract on COMEX gained 1.1% at $32.92 per ounce.

The MCX Bulldex, which tracks the real-time performance of gold and silver futures on the MCX, was up 299 points at 21659 points. The turnover of the June and August gold contracts was at INR 65.83 billion and INR 10.14 billion, respectively. The turnover in July and September silver contracts was at INR 13.14 billion and INR 716 million, respectively.

The spot gold-silver ratio, also known as the Mint ratio, rose to 102.24 on Monday, indicating that gold outperformed silver. The ratio measures the ounces of silver required to buy an ounce of gold. The ratio was 101.20 on Friday.

Outlook for the rest of the session:

--MCX gold seen at INR 93,739–INR 95,305 per 10 gm

--COMEX gold seen at $3,290.0–$3,336.0 an ounce

--MCX silver seen at INR 94,150-INR 95,352 per kg

--COMEX silver seen at $32.40-$33.10 an ounce

End

US$1 = INR 84.25

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

Edited by Saji George Titus

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