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Informist, Tuesday, May 6, 2025

By Sandeep Sinha

MUMBAI – Futures contracts of gold rose on the Multi Commodity Exchange of India and the COMEX because of strong demand from bullion-backed exchange-traded funds in China post-Labour Day holiday. The positive momentum was further lifted by the weakness in the dollar and increased geopolitical tension between Hamas and Israel.

At 1745 IST, the most active June GOLD contract on the MCX was up 1.9% at INR 96,460 per 10 grams. The most active June gold contract on the COMEX was 1.9% higher at $3,384.4 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.

"Gold prices surged sharply as geopolitical tensions between Israel and Hamas escalated, triggering a wave of safe-haven buying. The uncertainty surrounding the conflict has reinforced gold's role as a hedge, pushing prices higher across both global and domestic markets," Jateen Trivedi, vice-president and research analyst at LKP Securities, said in a note.

At 1745 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was down 0.2% at 99.62. 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 96,868, along with 3% goods and services tax, while 22-carat 10 gm was at INR 88,749 plus GST. The price of 18-carat gold was quoted at INR 72,666 plus GST in the retail market.

However, further upside in the yellow metal was restricted due to outflow in gold exchange-traded funds. On Monday, gold holdings with the SPDR Gold Trust, the world's largest gold-backed ETF, fell by 4.87 tonnes to 939.39 tonnes. The fund has a market value of $98.11 billion. On the National Stock Exchange, the total value of gold ETFs traded on Tuesday was INR 2.98 billion.

SILVER contracts rose, taking cues from COMEX and a firm trend in gold. At 1750 IST, the most active July contract on the MCX was up 2.3% at INR 96,575 per kg, while the same-month contract on COMEX soared 2.5% at $33.27 per ounce.

The MCX Bulldex, which tracks the real-time performance of gold and silver futures on the MCX, was up 460 points at 22115 points. The turnover of the June and August gold contracts was at INR 68.98 billion and INR 14.89 billion, respectively. The turnover in July and September silver contracts was at INR 25.80 billion and INR 1.46 billion, respectively.

The spot gold-silver ratio, also known as the Mint ratio, fell to 102.12 on Tuesday, indicating that gold underperformed silver. The ratio measures the ounces of silver required to buy an ounce of gold. The ratio was 102.63 on Monday.

Outlook for the rest of the session:

--MCX gold seen at INR 96,200–INR 96,900 per 10 gm

--COMEX gold seen at $3,330.0–$3,400.0 an ounce

--MCX silver seen at INR 95,800-INR 97,100 per kg

--COMEX silver seen at $32.90-$33.58 an ounce

End

US$1 = INR 84.43

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

Edited by Saji George Titus

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