At MCX, Gold December prices have near term resistance at Rs 48300 per 10 grams and support at Rs 47500 per 10 gram
By Tapan Patel
Commodity prices traded mixed with most of the commodities in the non-agro segment traded higher except Crude oil. Bullion prices ended up despite a firm dollar with fall in US bond yields. Crude oil prices traded weak on profit booking and weaker demand from China. Base metals traded up on eased worries over power shortage in China and positive demand prospects from the US.
Gold prices traded higher with spot gold prices at COMEX rose by nearly 2% to $1818 per ounce for the week. Gold December futures at MCX ended 0.71% up at Rs. 47972 per 10 gram limiting gains on sharp rupee appreciation. The spot rupee rose by more than 1% to 74.46 against the dollar for the week. Gold ETF holdings witnessed outflows as holdings at SPDR Gold Shares declined to 975.41 tonnes from previous week’s 981.14 tonnes. The CFTC data showed that money managers decreased their net long positions by 2363 lots last week.
Silver prices traded up with spot silver prices at COMEX rose by 1.08% at $24.16 per ounce for the week. MCX Silver December futures ended marginal down to Rs. 64332 per KG for the week on stronger rupee. The CFTC data showed that money managers decreased their net long positions by 5239 lots last week.
Bullion prices traded up witnessing strong buying in the second half of the week post US FOMC meeting with fall in US bond yields. The better than expected US non-farm payroll data pushed US bond yields lower, attracting buying in precious metals. The US Federal Reserve announced that it would taper its $120 billion bond purchases rolled out as pandemic-era aid from November. The US nonfarm payrolls increased 531,000 in October, the most in three months as per data released on Friday. The dollar index rose by 0.21% to 94.32 while 10 year US Treasury yields fell to 1.45% plunging from 1.56% of last week.
Bullion prices may keep risk premium higher over inflation worries and speculation that early tapering may hurt economic growth.
We expect gold prices to trade sideways to up this week with COMEX spot gold resistance at $1833 per ounce and support at $1780 per ounce. At MCX, Gold December prices have near term resistance at Rs 48300 per 10 grams and support at Rs 47500 per 10 gram. COMEX Spot silver has near term resistance at $25.30 per ounce with support at $22.80 per ounce. MCX Silver December has important resistance at Rs 67000 per KG and support at Rs 62500 per KG.
(Tapan Patel, Senior Analyst (Commodities) at HDFC Securities. Views expressed are the author’s own.)