By Tapan Patel
Commodity prices traded higher with most of the commodities in non-agro segment ended in green for the week supported by weaker dollar. Bullion prices gained on dovish FED while crude oil prices rallied on string demand outlook. Base metals traded higher on lower supply concerns and fall in dollar.
Gold prices traded higher with spot gold prices at COMEX ended in green with 0.67% gains at $1814 per ounce for the week. Gold prices at MCX rose by 0.66% at Rs 48,032 per 10 gram with flat rupee movement. The spot rupee ended around 0.01% weaker against the dollar for the week. Gold ETF holdings witnessed inflows as holdings at SPDR Gold Shares rose to 1031 tonnes from the previous week’s 1027 tonnes for the week. The CFTC data showed that money managers decreased their net long positions by 3004 lots in last week.
Silver prices ended higher with spot silver prices at COMEX rose by 1.25% to $25.49 per ounce for the week. MCX Silver September futures gained by 1.23% to Rs 67,847 per KG. Silver prices traded strong supported by rally in base metals and weaker dollar outperforming gold for the fourth week. The strong come back in industrial metals with higher demand prospectus and lower supply boosted buying in silver. The CFTC data showed that money managers decreased their net long positions by 5058 lots in last week.
Bullion prices traded strong during the week following cues from US FED comments post FOMC meeting. The US Federal Reserve Chair Jerome Powell said the central bank wasn’t ready to think of raising U.S. interest rates as it was still focused on buying assets to support an economy recovering from the coronavirus pandemic. He also refused to talk on the timing of Fed tapering signalling dovish stance. The US 10 year treasury yields ended at 1.24% while the dollar index fell by 0.79% dipping to four-week lows. The precious metals may trade firm with rising delta variant cases across globe and cautious approach from US FED with no hurry in taping bond-buying programme.
We expect gold prices to trade sideways to up in the coming week with COMEX spot gold resistance at $1860 per ounce and support at $1790 per ounce. At MCX, Gold October 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 $26.30 per ounce with support at $24.70 per ounce. MCX Silver September has important resistance at Rs 69,800 per KG and support at Rs 65,800 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.)