Bullion prices to consolidate in broader range with positive bias; check gold, silver support, resistance levels

By Saumil Gandhi

Commodity prices advanced with most of the commodities posting a gain for the week. Bullion prices rebounded from multi-month lows and closed for a weekly gain. Crude oil price soared by 4.40% as optimism for demand recovery from China and India, with China’s oil imports likely to hit a record high in 2023 and demand from India, the world’s third-biggest oil importer surging. While Natural gas prices surged to a five-week high on the back of anticipated stronger demand in the upcoming week after the latest forecasts continued to show below-normal temperatures during the second week of March in the US. Base metals prices rose between 2% to 4% last as sentiment improved after stronger Chinese Manufacturing PMI Data, investors’ optimism about further demand recovery for Industrial metals.

Comex Gold prices recovered almost 2.80% from weekly lows of $1804 per ounce, a rally extended throughout the last week and settled up by 2.51% for the week. Gold April future at MCX gained by 0.52% to Rs. 55721 per 10 grams. Domestic market gold prices rally capped by stronger Rupee. Rupee surged by 0.94% for the week against the US dollar.  Gold prices remained under pressure the last few weeks as an uptick in the US dollar and yields after stronger US macro data and hawkish comments from several Fed members but last week sentiment improved after Atlanta Fed President Raphael Bostic reiterated the case for a 25-basis point hike in March on Thursday. The US dollar and yields retreated from their recent peak and for the week US dollar dropped by 0.66%, the first weekly decline after four consecutive weeks rallied. Comex Silver prices recovered from the weekly low and closed higher by 2.40% at $ 21.26 per ounce. However, MCX Silver May’s future settled marginally lower by 0.20% to Rs 64401 per kg for the week on the back of a stronger Rupee. 

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We expect bullion prices will consolidate in a broader range with a positive bias, however selling pressure will likely see at a major resistance level. Comex spot gold has resistances at $1870/1895 per ounce and support at $1823/1805 per ounce. MCX Gold April future has resistance at Rs 56380 per 10 grams and support place at Rs 55140 per 10 grams. Comex Spot silver has resistances at $21.95/$22.40 per ounce and support at $20.40 per ounce. MCX Silver May future price face resistance at Rs 66900 per 1kg and find support at Rs 63200 per 1 kg for this week.

(Saumil Gandhi is a Senior Analyst (Commodities) at HDFC Securities. Views expressed are the author’s own.)