By Tapan Patel

Commodity prices traded mixed during the week passed by with Bullion prices traded higher while crude oil futures witnessed heavy selling on-demand growth concerns. Base metals witnessed mixed trade keeping the lower trading range on a stronger dollar and weak equity indices over pandemic worries.

Gold prices traded higher with spot gold prices at COMEX rose by more than 1% to $1745.23 per ounce for the week. Gold prices at MCX ended over half a percent up at Rs 45,021 per 10 grams as stronger rupee capped upside. The spot rupee was up by 0.37% against the dollar for the week. Gold ETF holdings continued outflow as holdings at SPDR Gold Shares remained unchanged at 1052 tonnes during the week. The CFTC data showed that money managers increased net long positions by 12845 lots in last week. 

Silver prices traded higher with spot silver prices at COMEX rose by more than 1% to $26.24 per ounce for the week. MCX Silver May futures rose by 1% to Rs. 67527 per KG. The CFTC data showed that money managers decreased net long positions by 1764 lots in last week. Silver prices capped upside with selling in industrial metals on demand worries. 

Bullion prices ended in green for the second consecutive week on inflation hedge despite of stronger dollar. The traders and investors weighed FED comments which led to buying in safe-haven assets. The precious metals rallied even after US 10 year treasury yields rose to 13 months highs while equities declined on higher inflation concerns. The US FED chairman signalled lower interest rates until 2023 avoiding any comment on the bond-buying program which raised uncertainty among the investors. The dollar index ended up by 0.26% at 91.92 mark for the week. The US 10 year treasury yields continued to hover near 13-month highs rose to 1.74% during the week limiting upside in the precious metals. 

We expect bullion prices to trade sideways to up in the coming week as gold prices have recovered from key support levels of $1690. COMEX spot gold has important resistance near $1760 per ounce and support at $1710 per ounce. At MCX, Gold April prices have near term resistance at Rs 45,600 per 10 grams and support at Rs 44,600 per 10 gram. COMEX silver spot has near term resistance at $26.80 per ounce with support at $25.50 per ounce. MCX Silver May has important resistance at Rs 69,000 per KG and support at Rs 65,800 per KG.

(Tapan Patel is a Senior Analyst (Commodities) at HDFC securities. The views expressed by the author are his own. Please consult your financial advisor before investing.)