Informist Poll
Gold seen trading with positive bias on safe-haven demand
This story was originally published at 15:19 IST on 5 March 2025
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By Sandeep Sinha
MUMBAI – Gold is likely to trade with a positive bias this month on safe-haven demand after US President Donald Trump's tariffs on Canada, Mexico, and China took effect Tuesday. The sentiment in gold will also get a boost from a likely correction in the Dollar Index, central bank purchases, rising stocks in COMEX warehouses and continued inflows in exchange-traded funds.
"We expect gold prices to test INR 86,000 and INR 88,000 per 10 gram on the higher side," said Manav Modi, a bullion analyst at Motilal Oswal. He suggested buying on dips near INR 84,000 levels, which act as a support.
The yellow metal saw profit-taking after hitting a lifetime high of $2,957.9 an ounce on Feb. 24 and INR 86,592 per 10 gram on Multi Commodity Exchange on Feb. 19. "The correction in the gold price is apparently already over...price has risen back above $2,900 per troy ounce," said Carsten Fritsch, commodity analyst at Commerzbank, in a note to its clients.
Fears of a trade war after the 25% tariff announced by the US on imports from Mexico and Canada and an additional 10% duty on Chinese goods are raising uncertainty in the market. The suspension by the US of military aid to Ukraine is also aiding the safe-haven appeal of gold.
The dollar index, which measures the strength in the greenback against a basket of six major currencies, fell 0.9% in February and has fallen 1.2% so far this month because of fears about a growth slowdown. A weaker greenback makes dollar-denominated commodities cheaper for those holding other currencies, thus improving demand for precious metals.
Gold holdings with the SPDR Gold Trust, the world's largest gold-backed ETF, rose by 39.61 tonnes to 904.38 tonne in February, the biggest monthly inflow since March 2022. Gold stocks at COMEX warehouses rose 221.58 tonnes to 1,225.92 tonnes in February, the exchange data showed.
According to the World Gold Council's latest report, central banks bought 18 tonnes of gold in January. Gold purchases by global central banks exceeded 1,000 tonnes for the third consecutive year in 2024 with purchases of 1,045 tonnes, the WGC data showed.
The chances of the US Federal Reserve interest rate cut had risen after the US Institute of Supply Management manufacturing purchasing managers' index fell to 50.3 in February from 50.9 in January. According to FedWatch, market participants are expecting a 75-basis-point interest rate cut this year.
According to the median of estimates of 16 broking firms polled by Informist, April gold futures on the Multi Commodity Exchange of India are seen in the range of INR 82,650-INR 86,600 per 10 grams this month. On the COMEX, prices are seen at $2,800.0-$2,950.0 an ounce. The April gold futures contract was at INR 86,010 per 10 grams on the MCX and $2,828.3 an ounce on the COMEX.
However, the yellow metal is finding it difficult to sustain above $2,950 an ounce. "Gold is likely to slip further towards $2,770 level as long as it stays below the $2,956 level," ICICI Securities said in a monthly commodities outlook.
The record high prices are keeping retail buyers in top consumers China and India away from purchases and may also keep further upside in check. Jewellery sales have plunged 70% in the first two months of 2025, said Surendra Mehta, national secretary at India Bullion and Jewellers Association.
The discount on gold in India widened to $4.7 per ounce on Feb. 28 from $1.2 an ounce on Jan. 31. India's gold imports in 2024 rose 4.3% to 743.9 tonnes from 713.31 tonnes in 2023, the Commerce Ministry data showed.
Money managers reduced their net long positions in COMEX gold by 36,235 lots, or 15.7% to 194,357 lots as of Feb. 25, according to Commodity Futures Trading Commission data.
"After registering a 14.4% rally from its low of $2,583, COMEX gold is undergoing a phase of anticipated profit-taking. Prices are encountering strong resistance near the $3,000 mark, suggesting a potential corrective move toward $2,749," Riya Singh, Research Analyst for Commodities and Currency at Emkay Global, observed.
Gold prices are expected to remain constrained near resistance, with immediate support seen at $2,760 an ounce, Singh said.
Investors will keep a close eye on the US February non-farm payrolls data, US CPI, US final GDP and core personal consumption expenditure price index data for further cues. They will also watch out for the interest rate decisions by the US Federal Reserve, European Central Bank, Bank of England and Bank of Japan.
Following is the summary of the poll by Informist on gold prices in March and details of estimates by respondents, in alphabetical order:
|
Brokerage |
MCX support (INR/10 gm) |
MCX resistance (INR/10 gm) |
COMEX support ($/oz) |
COMEX resistance ($/oz) |
|
Axis Securities |
83,000 |
86,000 |
2,800 |
2,960 |
|
Emkay Global |
80,600 |
88,000 |
2,795 |
2,950 |
|
Finlit Consulting |
82,500 |
86,000 |
2,800 |
2,950 |
|
HDFC Securities |
82,400 |
86,600 |
2,775 |
2,960 |
|
ICICI Securities |
82,000 |
86,000 |
2,800 |
2,950 |
|
JM Financial Services |
84,000 |
86,600 |
2,850 |
2,975 |
|
Kedia Comtrade |
82,800 |
86,200 |
2,740 |
2,940 |
|
Kotak Securities |
83,000 |
86,000 |
2,800 |
2,950 |
|
LKP Securities |
82,000 |
86,500 |
2,800 |
2,920 |
|
Mirae Asset Sharekhan |
83,300 |
86,400 |
2,814 |
2,921 |
|
Motilal Oswal |
83,350 |
88,000 |
-- |
-- |
|
Prithvi Finmart |
82,800 |
85,600 |
2,784 |
2,935 |
|
Religare Broking |
81,600 |
90,500 |
2,750 |
3,050 |
|
Reliance Securities |
80,500 |
87,875 |
2,725 |
2,975 |
|
RiddhiSiddhi |
83,500 |
87,200 |
2,830 |
2,930 |
|
Ventura Securities |
81,000 |
88,000 |
2,780 |
3,000 |
|
Median |
82,650 |
86,600 |
2,800 |
2,950 |
End
US$1 = INR 86.99
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Akul Nishant Akhoury
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