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Informist, Monday, Jul. 7, 2025

By Ashutosh Pati

MUMBAI – Futures contracts of gold fell Monday on the Multi Commodity Exchange of India, tracking a fall in contracts on the COMEX because of a rise in the dollar index. Market sentiment was further hurt by strong US economic data, which dented hopes of US Federal Reserve lowering interest rates soon.

At 1505 IST, the dollar index, which measures the strength in the greenback against a basket of six currencies, was up 0.5% at 97.41. A strong dollar makes dollar-denominated commodities, such as gold, expensive for those holding other currencies, denting demand.

"The precious metal's decline Monday comes after President Trump signaled a 10% tariff on countries aligned with the Brics bloc, boosting the dollar and weighing on gold," Dow Jones quoted MUFG analysts as saying in a note. "While US trade negotiations ahead of the Jul. 9 tariff deadline has reintroduced some uncertainty, US officials have hinted at potential extensions and staggered implementations, further reducing gold's haven demand," the analysts added.

US President Donald Trump late Sunday said he will impose a 10% additional tariff on countries aligning with "Anti-American policies" of the BRICS group of nations. "There will be no exceptions to this policy," Trump said in a post on social media platform Truth Social.

At 1507 IST, the most-active August GOLD contract on the COMEX was 0.7% lower at $3,319.1 per ounce. The most-active August gold contract on the MCX was 0.4% lower at INR 96,640 per 10 grams.

Moreover, The US labor market demonstrated resilience, as new data showed American firms added 147,000 jobs in June, surpassing economists' expectations of 110,000 additions. The unemployment rate dropped to 4.1%, down from 4.2% in May and forecasts of 4.3%. "Rate futures show traders no longer expect a Fed rate cut this month and are pricing in a total of just two quarter-point reductions by the year-end," Motilal Oswal Wealth Management said in a report.

SILVER contracts fell on the MCX and COMEX, tracking losses in gold and industrial metals. At 1520 IST, the most-active September silver contract on the MCX was down 0.4% at INR 107,950 per kg. The same-month contract on COMEX was 0.9% lower at $36.75 per ounce.

Outlook for the rest of the session:

--MCX gold seen at INR 96,375–INR 97,560 per 10 grams

--COMEX gold seen at $3,297.5–$3,366.5 an ounce

--MCX silver seen at INR 107,150-INR 109,490 per kg

--COMEX silver seen at $36.42-$37.68 an ounce

End

US$1 = INR 85.86

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

Edited by Akul Nishant Akhoury

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