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Informist, Wednesday, May 7, 2025

By Sandeep Sinha

MUMBAI – Futures contracts of gold fell on the Multi Commodity Exchange of India and COMEX because of a rebound in the dollar ahead of the US Federal Open Market Committee interest rate decision later Wednesday. The sentiment for the yellow metal was also hurt by potential trade talks between the US and China, outflow in gold exchange-traded funds and profit-taking by traders after sharp gains in the past two sessions, analysts said.

The Federal Open Market Committee is widely expected to keep interest rates unchanged at 4.25-4.50%.

At 1745 IST, the most active June GOLD contract on the MCX was down 0.2% at INR 97,297 per 10 gram. The most active June gold contract on the COMEX was 0.7% lower at $3,400.0 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.

On Tuesday, gold holdings with the SPDR Gold Trust, the world's largest gold-backed ETF, fell by 1.43 tonnes to 937.96 tonnes. The fund has a market value of $102.23 billion. On the National Stock Exchange, the total value of gold ETFs traded on Wednesday was INR 4.18 billion, up from INR 2.98 billion on Tuesday.

At 1745 IST, the dollar index, which measures the strength in 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 97,426, along with 3% goods and services tax, while 22-carat 10 gm was at INR 89,242 plus GST. The price of 18-carat gold was quoted at INR 73,070 plus GST in the retail market.

SILVER contracts fell, taking cues from COMEX and a weak trend in gold. At 1750 IST, the most active July contract on the MCX was down 0.1% at INR 96,580 per kg, while the same-month contract on COMEX fell 0.7% at $33.14 per ounce.

The MCX Bulldex, which tracks the real-time performance of gold and silver futures on the MCX, was down 61 points at 22201 points. The turnover of the June and August gold contracts was at INR 64.12 billion and INR 8.69 billion, respectively. The turnover in July and September silver contracts was at INR 14.03 billion and INR 606.20 million, respectively.

The spot gold-silver ratio, also known as the Mint ratio, fell to 102.94 on Wednesday, indicating that gold underperformed silver. The ratio measures the ounces of silver required to buy an ounce of gold. The ratio was 103.27 on Tuesday.

Outlook for the rest of the session:

--MCX gold seen at INR 96,900–INR 96,500 per 10 gm

--COMEX gold seen at $3,335.0–$3,422.0 an ounce

--MCX silver seen at INR 95,500-INR 97,500 per kg

--COMEX silver seen at $32.80-$33.30 an ounce

End

US$1 = INR 84.82

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

Edited by Akul Nishant Akhoury

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