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Informist, Friday, Aug. 22, 2025

By Ashutosh Pati

MUMBAI – Futures contracts of gold were steady Friday on the Multi Commodity Exchange of India, despite negative cues from the COMEX, because of a sharp fall in the rupee against the dollar. Gold contracts traded in the red on the COMEX because of a firm dollar. Market participants remained cautious ahead of the US Federal Reserve Chair Jerome Powell's speech at the Jackson Hole Symposium later in the day.

At 1612 IST, the most-active December GOLD contract on the COMEX was 0.3% lower at $3,371.8 per ounce. The most-active October gold contract on the MCX was steady at INR 99,367 per 10 grams.

On the MCX, gold prices recouped the day's losses and were steady because of a fall in the rupee against the dollar. The rupee ended sharply lower against the dollar Friday, posting its biggest single day fall in over three weeks, due to a rise in the dollar index ahead of Powell's speech. The rupee settled at 87.5300 a dollar Friday, depreciating 0.3% from its previous close and fell for the third consecutive trading day. When the rupee depreciates against the dollar, prices of gold in the domestic market adjust as the precious metal is priced in rupees.

Diminishing bets of an interest rate cut by the Fed in September is also weighing on market sentiment. The CME's FedWatch tool now shows a 69% chance of a rate cut by the US FOMC in September, down from 75% a day ago and 85% a week ago. Higher interest rates make the non-interest-bearing precious metal less attractive to investors. 

"The correction in market expectations was triggered by comments from a Fed president who said she would oppose an interest rate cut at present," Carsten Fritsch, commodity analyst at Commerzbank, said in a report. "In addition, the minutes of the last Fed meeting in July showed that a majority of FOMC members considered inflation risks to be higher than risks to the labour market. This means that the bar is set somewhat lower for Fed Chair Powell to surprise the market with a dovish stance in his speech today," Fritsch added.

Gold has been trading between $3,250 and $3,450 per ounce since May-end. If Powell reinforces hopes of interest rate cuts in his speech later in the day, gold prices may rise slightly, Barbara Lambrecht, commodity analyst at Commerzbank, said in the report. However, this is unlikely to be enough to break prices out of the range-bound movement "as the market has already positioned itself accordingly," Lambrecht added.

SILVER contracts fell on the MCX and the COMEX. At 1638 IST, the most-active September silver contract on the MCX was down 0.2% at INR 113,504 per kilogram. The same-month contract on COMEX was down 0.3% at $37.97 per ounce.

Outlook for the rest of the session:

--MCX gold seen at INR 98,700–INR 99,900 per 10 grams

--COMEX gold seen at $3,340.0–$3,410.0 an ounce

--MCX silver seen at INR 112,200-INR 114,800 per kg

--COMEX silver seen at $37.50-$38.50 an ounce

End

US$1 = INR 87.53

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

Edited by Subhojit Sarkar

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