Commodity costs traded larger through the week passed by with most of the commodities in Non-agro segment witnessing sturdy purchasing on a weaker dollar. Bullion costs gained amid inflation hedge when base metals rallied on reduce provide and larger demand outlook. Crude oil costs traded up with increasing hopes for fuel demand recovery.
Gold costs traded larger with spot gold costs at COMEX rose by 1.87% to $1776.51 per ounce for the week. Gold costs at MCX rose by 1.63% to Rs. 47353 per 10 gram when stronger rupee kept upside restricted. The spot rupee ended .52% larger against the dollar for the week. Gold ETF holdings continued outflow as holdings at SPDR Gold Shares fell to 1020 tonnes through the week down from the earlier week’s 1033 tonnes. The CFTC information showed that income managers decreased their net lengthy positions by 12,640 lots in last week.
Silver costs traded larger with spot silver costs at COMEX ended 2.78% up to $25.97 per ounce for the week. MCX Silver May futures rose by 2.54% to Rs 68,684 per KG. The CFTC information showed that income managers improved their net lengthy positions by 4001 lots in last week. Silver costs outperformed gold amid sharp purchasing in industrial metals.
Bullion costs witnessed sturdy rally with gold costs reporting the ideal week in the last 4 months as traders and investors bet against larger inflation worries. The valuable metals got enhance from dollar decline and fall in US bond yields more than FED comments. The US FED reiterated to preserve ultra-low interest prices in current meetings. The dollar index fell beneath 92 mark losing .66% when US 10 year treasury yields retreated to 1.58% from the 14 month higher of 1.77% of the week. Bullion costs traded larger on increasing geopolitical tensions just after US imposed sanctions on Russia. The increasing virus instances in Europe and partial lockdown measures in India and Brazil also supported valuable metals to trade larger through the week.
We count on gold costs to trade sideways to up in the coming week as costs are witnessing sturdy resistance close to $1785. The break above $1785 may well lead costs towards $1820 with help at $1740 per ounce. At MCX, Gold June costs have close to term resistance at Rs 48,000 per 10 grams and help at Rs 46,800 per 10 gram. COMEX silver spot has close to term resistance at $26.80 per ounce with help at $24.60 per ounce. MCX Silver May has significant resistance at Rs 71,500 per KG and help at Rs 66,500 per KG.
(Tapan Patel is a Senior Analyst (Commodities) at HDFC securities. The views expressed by the author are his personal. Please seek the advice of your monetary advisor prior to investing.)