Gold Under Check, INR Strength Weighs On Local Futures

COMEX Gold stayed weak amid broad dollar strength today as the US Dollar Index soared to a fresh 2 week of 96.50, rising for sixth consecutive session. The yellow metal cut losses on signs of steady fund buying though. The COMEX Gold futures currently trade at $ 1310 per ounce, down 0.30% on the day. MCX Gold futures are currently trading at Rs 33135 per 10 grams, down 0.60% on the day as the INR hit a one week high of 71.30 per US dollar.

The World Gold Council (WGC) noted in a latest update that the holdings in global gold-backed ETFs and similar products rose in January by 72 tonnes (t) to 2,513t, equivalent to US$ 3.1bn in inflows, marking the fourth consecutive month of net inflows. Notably, total holdings have not been this high since March 2013, when the price of gold was 22% higher. Global gold-backed ETF holdings have grown 6% over the past two months, driven by market uncertainty and a shift in sentiment that drove the price of gold 3.5% higher in January alone.

Global assets under management (AUM) rose by 6% in US dollars to US$ 107bn over the month. North American inflows represented 72% of global inflows. North American funds had inflows of 53t (US$ 2.2bn, 4.0% AUM) while holdings in European funds rose by 20t (US$ 902mn, 1.9%). The funds listed in Asia increased by 0.1t (US$ 3mn, 0.1%) while other regions saw a decrease in holdings of 1.3t (US$ 62mn, 4.6%).