By Tapan Patel
Commodity prices traded mixed with most of the commodities in the Non-Agro segment traded higher while crude oil and silver prices ended in red. Gold prices traded higher on lower bond yields while base metals traded higher on lower supply concerns and higher demand. Crude oil futures hovered on mixed fundamentals with delayed OPEC decision on output quota.
Gold prices traded higher with spot gold prices at COMEX rose by 1.18% to $1808 per ounce for the week reporting the third weekly gain. Gold prices at MCX rose by 1.35% at Rs. 47923 per 10 gram. Gold ETF holdings witnessed outflow as holdings at SPDR Gold shares fell to 1040 tonnes from previous week’s 1043 tonnes for the week. The CFTC data showed that money managers increased their net long positions by 20488 lots last week.
Silver prices ended lower with spot silver prices at COMEX fell by 1.39% to $26.10 per ounce for the week. MCX Silver September futures ended up by 0.26% to Rs. 69297 per KG. Silver prices capped upside in mid-week with fall in base metals but later recovered in line with gold and rebound in industrial metals.
Bullion prices traded higher with fall in US treasury yields and weaker dollar over mixed global cues. The traders and investors weighed US FOMC minutes as few of FED officials advocated to keep the bond buying program unchanged till significant economic recovery. The US 10 year treasury yields fell to 1.36% dipping below 1.25% during the week which boosted buying in precious metals despite a firm dollar index. Gold prices were supported by rising worries over fast spreading of Delta variant virus in some parts of the world and slower pace of economic recovery.
We expect gold prices to trade sideways to up in the coming week with COMEX spot gold resistance at $1820/1850 per ounce and support at $1760 per ounce. At MCX, Gold August prices have near term resistance at Rs 48,600 per 10 grams and support at Rs 47,500 per 10 gram. COMEX silver spot has near term resistance at $27.20 per ounce with support at $25.40 per ounce. MCX Silver September has important resistance at Rs 71,800 per kg and support at Rs 67,000 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.)