By Saumil Gandhi
Last week, the commodity market, bullion and energy complex witnessed insane volatility while base metals price steady within range. Comex Gold prices surged to 11 months high of $ 1989 per ounce and for the week price rose by almost 6%, the biggest weekly gain since March 2020. In the domestic market, MCX Gold April future hit an all time high of Rs 59,461 per 10 grams. While Crude oil prices tumbled nearly 12% in the week, its biggest weekly fall since December. NYMEX WTI Crude oil futures fell by 12.95% for the week whereas MCX Crude Oil March dropped by 12.0% as concern over demand and rising supply and traders worried about financial crisis. Base metals prices consolidated in range and further downside capped by a host of bailout measures to avert a banking crisis soothed investors’ nerves, while a weaker dollar and hopes for Chinese demand recovery also boosted sentiment.
Throughout the last week action in the gold market has been very impressive as the bullish traders have seemingly managed to shift fundamental focus away from bearish influences to bullish. Recent rally in yellow metals supported by safe haven buying. Concerns about the banking crisis continue and fear of an ongoing banking crisis does not look to dissipate fully and will likely require days without specific fresh rumors of trouble at other institutions. Additionally, fresh speculative and investment buying saw last week, fresh speculative buying in gold has continued to expand as traders expect that the Fed would not be as aggressive this week because of issues in the US financial sector. Gold ETF holdings last week have reversed the early pattern of outflows and have now posted two large back-to-back daily inflows.
Comex Silver prices posted weekly gain by 10.0% at $22.60 per ounce. MCX Silver May futures settled higher by 8.80 % to Rs 68501 per kg for the week. In the last two weeks Comex silver price
Investors focus now on the Federal Reserve’s policy decision this week and whether it will stick with its aggressive path or change its stance after the recent banking crisis. We expect the bullion rally will continue this week and Comex gold price
MCX Gold April future has resistances at Rs 60,360/61,510 per 10 grams and supports place at Rs 58,300/57,500 per 10 grams. Comex Spot silver having resistances at $ 23.40/$24.60 per ounce and support at $21.20 per ounce. MCX Silver May future price face resistances at Rs 70,300/71,500 per 1kg and find supports at Rs 66,200/65,100 per 1 kg for the next week.
(Saumil Gandhi, Senior Analyst (Commodities), HDFC