Bullion prices traded mixed with Gold prices extended gains for the fourth week with mixed global cues and FED comments while silver prices parted ways from gold witnessing selling in the last trading session.
By Tapan Patel
Commodity prices traded mixed with gold prices ending in green while the rest of the commodities in the non-agro segment witnessed selling during the previous week. Crude oil prices reported the worst week in months on expectations of OPEC deal and weaker demand while base metals hovered in range with mixed fundamentals.
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Gold prices traded higher with spot gold prices at COMEX ended 0.21% up to $1812 per ounce for the week managing to hold four-week gains on the trot. Gold prices at MCX rose by 0.27% at Rs 48,053 per 10 gram despite of rupee appreciation. The spot rupee ended around 8 paise stronger against the dollar for the week. Gold ETF holdings continued to witness outflow as holdings at SPDR Gold Shares fell to 1028.5 tonnes from the previous week’s 1040 tonnes for the week. The CFTC data showed that money managers increased their net long positions by 9985 lots in last week.
Silver prices ended lower with spot silver prices at COMEX fell by 1.69% to $25.66 per ounce for the week. MCX Silver September futures ended down by 1.41% to Rs 68,319 per KG. Silver prices underperformed gold prices for the second week following weak cues from industrial metals. The CFTC data showed that money managers decreased their net long positions by 879 lots in last week.
Bullion prices traded mixed with Gold prices extended gains for the fourth week with mixed global cues and FED comments while silver prices parted ways from gold witnessing selling in the last trading session. The precious metals were up throughout the week with a decline in US treasury yields. However, prices trimmed gains with strength in the dollar index and recovery in US bond yields on dovish FED stance. US Fed Chairman Jerome Powell defended the central bank’s continued support for the US economy on Thursday even as inflation runs at uncomfortable levels, reiterating comments made this week that it was still too soon to scale back stimulus. The US 10 year treasury yields ended at 1.30% after falling below 1.29% during the week. The dollar index gained over half a per cent for the week capping upside in the precious metals.
We expect gold prices to trade sideways to up in the coming week with COMEX spot gold resistance at $1833 per ounce and support at $1790 per ounce. At MCX, Gold August prices have near term resistance at Rs 48,600 per 10 grams and support at Rs 47,700 per 10 gram. COMEX silver spot has near term resistance at $26.80 per ounce with support at $24.90 per ounce. MCX Silver September has important resistance at Rs 70,500 per KG and support at Rs 66,500 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.)