Gold, crude oil continue bullish momentum, base metals prices correct; traders eye US CPI, Fed meeting minutes

As bullish bets on silver increase, gold and crude oil prices extend their respective rallies. However, base metal prices are witnessing a correction amid a production cut by OPEC and decline in US oil inventories.

commodities, crude, gold, oil
Gold prices' rally continued to extend last week as the appetite for safe-haven demand continued to support bullish momentum.

By Saumil Gandhi 

In the commodity market, bullish momentum continued in the bullion pack and crude oil, while most base metals prices corrected last week. The yellow metal remains the preferred asset class for investors in the current scenario. The Comex spot gold price surged to a fresh 52-week high of $2032 per ounce, and for the week, the price settled up by 1.96% at $2007 per ounce. Meanwhile, in the domestic market, gold prices in MCX crossed Rs 61,000 per 10 grams, a fresh lifetime high. In the energy complex, crude oil prices posted a third consecutive weekly gain. NYMEX WTI crude oil prices soared 6.65% last week as an unexpected supply cut by OPEC and its alliance and a decline in US oil inventories indicated a tight market outlook. Base metals prices witnessed a correction amid ongoing concerns about global economic growth after a series of weak macro data from the US.

Gold prices‘ rally extended last week as the appetite for safe-haven demand continued to support bullish momentum. The yellow metal’s latest upswing came after a series of weaker US macro data suggested a cooling in economic activity and increased expectations that the Fed may not need to raise rates much further and could even pause the tightening cycle in May’s meeting. On the other hand, demand from central banks and the investment front boosted bullish sentiment. In February, central banks added another 52 tons of gold to their reserves, marking the 11th straight month of central bank net gold purchases. China was the biggest buyer in February. While physically backed gold ETFs saw net inflows in March, the first inflows for ten months, as the banking crisis helped gold demand.

Comex silver prices posted a fourth consecutive weekly gain, and the price rose by 3.65% to $24.97 per ounce. MCX Silver May futures settled higher by 3.26% to Rs 74570 per kg for the week. Speculators increased their bullish bet in silver by 8,661 net-long positions to 19,493. The net-long position was the most bullish in nine weeks.

This week, bullion prices will be influenced by macro data such as US CPI and Fed meeting minutes outcome. On the technical front, focusing on the daily chart, the short-term bias remains firm in gold, with the RSI in overbought territory. We expect Comex spot gold prices may witness healthy correction around $1980 to $1960 per ounce. However, the trend remains bullish until the price holds above the $1935 level, and the uptrend will resume once the price crosses $2032 per ounce. Comex gold has resistances at $2030/$2065 per ounce and supports at $1980/$1935 per ounce. MCX Gold June futures have resistances at Rs 61,170/62,300 per 10 grams and supports at Rs 59,700/59,080 per 10 grams. Comex Spot silver has resistance at $26.40 per ounce and support at $22.80 per ounce. MCX Silver May futures prices face resistances at Rs 75,400/77,000 per 1kg and find supports at Rs 73,100/71,780 per 1 kg for the next week.

(By Saumil Gandhi, Senior Analyst (Commodities), HDFC Securities. Views expressed are author’s own. Please consult your financial advisor before investing.) 

Get live Share Market updates and latest India News and business news on Financial Express. Download Financial Express App for latest business news.

First published on: 10-04-2023 at 08:35 IST