Gold prices traded lower with spot gold prices at COMEX ended down by 1.82% to $1814 per ounce reporting a second straight weekly decline. Gold prices at MCX ended 4.21% lower to Rs. 47256 per 10 grams for the week reflecting a change in custom duty. The spot rupee ended flat appreciating 0.03% against the dollar for the week. Gold ETF holdings witnessed outflows as holdings at SPDR Gold Shares fell to 1156.51 tonnes during the week from previous week’s 1160 tonnes. The CFTC data showed that money managers decreased net long positions by 9675 lots in last week as prices breached $1800 during the week.
Silver prices ended marginally down with spot silver prices at COMEX fell by 0.25% to $26.92 per ounce for the week. MCX Silver March futures fell by 1.39% to Rs. 68738 per KG. The CFTC data showed that money managers cut net long positions to 15 week low by 3705 lots in last week
Bullion prices traded under pressure with rally in US bond yields and stronger dollar which diverted investors focus from yellow metal to riskier assets. The dollar index rose by 0.51% for the week along with US 10 yr bond yields which rose to the highest levels since last March. The lack of clarity over additional US stimulus from Biden administration and strong economic data triggered selling in precious metals during the week. However, disappointed non-farm payroll data on Friday landed some support to bullion prices to overcome weekly losses.
We expect bullion prices to trade sideways to down for short term with COMEX spot gold having resistance near $1860 per ounce and support at $1760 per ounce. At MCX, Gold April prices have near term resistance at Rs 47800 per 10 grams and support at Rs 46500 per 10 gram. COMEX silver spot has near term resistance at $28 & $30 per ounce with support at $25.80 per ounce. MCX Silver March has important resistance at Rs 72600 per KG and support at Rs 66000 per KG.
(Tapan Patel is a Senior Analyst (Commodities) at HDFC securities. Views expressed are the author’s own. Please consult your financial advisor before investing.)