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Informist, Wednesday, Aug. 6, 2025

By Ashutosh Pati

MUMBAI – Futures contracts of gold on the Multi Commodity Exchange of India and the COMEX fell Wednesday as traders resorted to book profits after the sharp rise in prices in the previous sessions, analysts said. Gold contracts on the MCX rose to a record high on Tuesday while contracts on the COMEX rose for three consecutive sessions till Tuesday.

At 1707 IST, the most-active December GOLD contract on the COMEX was 0.4% lower at $3,420.9 per ounce. The most-active October gold contract on the MCX was at INR 100,939 per 10 grams, down 0.4% from the previous close.

However, the downside in gold prices was limited by concerns over an economic slowdown in the US and rising expectations of an interest rate cut by the US Federal Open Market Committee. The US Institute for Supply Management services Purchasing Managers' Index slipped to 50.1 in July, below market expectations. The CME's FedWatch tool now shows 87% chances of a rate cut by the Federal Open Market Committee in September, against 47% a week ago. Lower interest rates make the non-interest-bearing precious metal more attractive to investors.

"These boosted demand for safe-havens and the attractiveness of non-interest bearing bullion," Dow Jones quoted MUFG analysts as saying in a note. "Recent US data pointed to stagnation in the services sector and persistent weakness in the labour market and consumer spending," the analysts added.

Moreover, concerns around the independence of the US Federal Reserve after the resignation of Fed Governor Adriana Kugler raised the safe-haven appeal of the precious metal. Kugler was originally set to leave in January. "US President (Donald) Trump has already announced that he will name a candidate for her (Kugler's) succession this week. Who he nominates could provide an important indication of how strongly he intends to influence the Fed," Thu Lan Nguyen, head of FX and commodity research at Commerzbank, said in a report.

Meanwhile, Trump said the planned tariffs on imports of pharmaceutical products into the US may rise up to 250%. In an interview with CNBC Tuesday, Trump said he will initially impose a "small tariff" and within a given period of time he will raise this rate to 150% and then 250%. "These developments continue to keep investor sentiment cautious, offering underlying support to the safe-haven appeal of gold despite short-term price consolidation," Kotak Securities said.

SILVER contracts fell on the MCX but rose on the COMEX. At 1724 IST, the most-active September silver contract on the MCX was 0.2% lower at INR 113,309 per kg. The same-month contract on COMEX was up 0.1% at $37.87 per ounce.

Outlook for the rest of the session:

--MCX gold seen at INR 99,218–INR 102,232 per 10 grams

--COMEX gold seen at $3,297.1–$3,420.1 an ounce

--MCX silver seen at INR 110,733-INR 115,523 per kg

--COMEX silver seen at $36.75-$38.66 an ounce

End

US$1 = INR 87.73

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

Edited by Tanima Banerjee

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