By Tapan Patel
Commodity prices traded firm during the previous week while most of the commodities in the non-agro segment witnessed recovery. Bullion prices recovered from the support levels on safe-haven buying while crude oil futures traded volatile on OPEC talks. Base metals witnessed mixed trade keeping the firm trading range on China demand.
Gold prices ended in green with spot gold prices at COMEX recovered to $1734.82 per ounce for the week. Gold prices at MCX rose by 1.73% to Rs 45,418 per 10 grams as weaker rupee supported domestic gold prices limiting the downside. The spot rupee ended 0.81% higher against the dollar for the week. Gold ETF holdings continued outflow as holdings at SPDR Gold Shares fell to 1033 tonnes during the week down from the previous week’s 1037 tonnes. The CFTC data showed that money managers decreased their net long positions by 5,547 lots in last week.
Silver prices ended marginally down with spot silver prices at COMEX ended near $25.09 per ounce for the week. MCX Silver May futures ended up near to Rs 65,040 per KG. The CFTC data showed that money managers decreased their net long positions by 1659 lots in last week. Silver prices rebounded along with base metals on stimulus boost and dollar decline.
Bullion prices witnessed strong recovery from key support levels as ease in US bond yields and dollar decline boosted buying in the safe-haven asset. The dollar index fell below 93 mark while US 10 year treasury yields retreated to 1.68% from highs of 1.77% of the week. The precious metals rebounded on dollar debasement after US President Joe Biden unveiled multi-trillion infrastructure plan on Wednesday. The rising virus cases in Europe and fear of lockdown measures also supported bullion prices to trade higher during the week.
We expect bullion prices to trade sideways to up in coming week as prices have held key support levels at $1680 with important resistance at $1760 per ounce. At MCX, Gold June prices have near term resistance at Rs 45,900 per 10 grams and support at Rs 44,600 per 10 gram. COMEX silver spot has near term resistance at $26.20 per ounce with support at $23.60 per ounce. MCX Silver May has important resistance at Rs 67,800 per KG and support at Rs 63,000 per KG.
(Tapan Patel is a Senior Analyst (Commodities) at HDFC securities. The views expressed are the author’s own. Please consult your financial advisor before investing.)