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Informist, Wednesday, Mar. 5, 2025

By Sandeep Sinha

MUMBAI – Futures contracts of gold were steady on the Multi Commodity Exchange of India because of the sharp appreciation in the rupee Wednesday, while contracts on COMEX rose owing to the weaker dollar. The positive sentiment was supported by inflows in gold exchange-traded funds and geopolitical uncertainty.

The rupee strengthened for the third straight day and settled 0.4% higher at 86.95 a dollar, aligning with regional currencies as risk assets surged, while the safe-haven greenback weakened due to falling US Treasury yields. A firm rupee makes commodities priced in dollars cheaper for domestic buyers.

On Monday, GOLD holdings with the SPDR Gold Trust, the world's largest gold-backed ETF, rose by 870 kg to 901.80 tonnes. The fund has a market value of $84.22 billion. On the National Stock Exchange, the total value of gold ETFs traded Wednesday was INR 3.73 billion, up from INR 1.59 billion Tuesday.

"Trump's doubled tariffs on China and levies against Canada and Mexico have sparked inflation and global growth slowdown concerns, bolstering gold's appeal," Kotak Securities said.

At 1815 IST, the dollar index, which measures the strength of the greenback against a basket of six major currencies, was down 0.5% at 104.95. A weak greenback makes dollar-denominated commodities cheaper for those holding other currencies, thus improving demand for precious metals.

At 1815 IST, the most-active April gold contract on the MCX was flat at INR 85,995 per 10 grams. The most-active April gold contract on COMEX was up 0.2% at $2,925.10 per ounce. The highest call open interest was at INR 90,000 strike price, indicating a bullish view. The highest put open interest was at INR 85,000-INR 84,000 strikes for the Mar. 26 contract.

Investors will take further cues from the US non-farm payroll data to be released Friday.

SILVER contracts rose, taking cues from COMEX and firm trends in gold and industrial metals. At 1815 IST, the most-active May contract on the MCX was up 1.3% at INR 97,460 per kg. The same-month contract on COMEX was up 1.8% at $32.98 per ounce. On the options front, the highest call open interest was at the INR 97,000-INR 100,000 strike prices. The highest put open interest was at INR 90,000 strike for the Apr. 24 expiry contract.

The MCX Bulldex, an index that tracks the real-time performance of gold and silver futures on the MCX, was up 68 points at 20511 points. The April and June gold contracts on the MCX recorded turnovers of INR 45.94 billion and INR 7.51 billion, respectively. The May and July silver contracts saw turnovers of INR 21.74 billion and INR 1.25 billion, respectively.

The spot gold-silver ratio, also known as the Mint ratio, fell to 90.07 Wednesday, indicating that gold had underperformed silver. The ratio measures the ounces of silver required to buy an ounce of gold. The ratio was 91.49 Tuesday.

Outlook for the rest of the session:

--MCX gold seen at INR 85,661–INR 86,341 per 10 gm

--COMEX gold seen at $2,900.53–$2,947.83 an ounce

--MCX silver seen at INR 96,426-INR 97,933 per kg

--COMEX silver seen at $32.42-$33.44 an ounce

End

US$1 = INR 86.95

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

Edited by Rajeev Pai

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