By Tapan Patel
Commodity costs traded mixed with bullion costs witnessed a decline on a stronger dollar and powerful equity indices in spite of of increasing virus instances. Crude oil costs ended in green following a powerful recovery on larger demand outlook whilst base metals kept firm trading on-demand recovery and reduce inventories.
Gold costs traded weak with spot gold costs at COMEX ended more than half a per cent down to $1802 per ounce reporting the 1st weekly loss in 5 weeks. Gold costs at MCX fell by 1.08% at Rs 47534 per 10 gram pressured by rupee appreciation. The spot rupee ended about .21% stronger against the dollar for the week. Gold ETF holdings continued to witness outflow as holdings at SPDR Gold Shares fell to 1027 tonnes from the prior week’s 1028.5 tonnes for the week. The CFTC information showed that revenue managers elevated their net extended positions by 5826 lots in last week.
Silver costs ended reduce with spot silver costs at COMEX fell by 1.90% to $25.18 per ounce for the week. MCX Silver September futures fell by almost 2% to Rs. 67024 per KG. Silver costs continued underperforming gold costs for the third week on mixed trends in industrial metals and stronger dollar. The CFTC information showed that revenue managers decreased their net extended positions by 8431 lots in last week.
Bullion costs traded beneath stress on stronger dollar and recovery in US bond yields. Gold costs kept reduce trading variety hovering close to $1800 per ounce on mixed international cues. The rise in dollar index underpinned demand for secure-haven more than increasing virus instances. The valuable metals also kept downside restricted on dovish ECB stance soon after President Christine Lagarde mentioned Thursday that the central bank will not derail the recovery by withdrawing emergency help as well early. The US 10 year treasury yields ended at 1.28% soon after falling to 1.25% for the duration of the week. The dollar index ended .24% up for the second straight week. The traders and investors will eye for FOMC meeting on 27-28 July to seek clarity more than FED tapering.
We anticipate gold costs to trade sideways to down in the coming week with COMEX spot gold resistance at $1833 per ounce and help at $1780 per ounce. At MCX, Gold August costs have close to term resistance at Rs 48200 per 10 grams and help at Rs 47100 per 10 gram. COMEX silver spot has close to term resistance at $25.80 per ounce with help at $24.60 per ounce. MCX Silver September has critical resistance at Rs. 69500 per KG and help at Rs 65800 per KG.
(Tapan Patel is a Senior Analyst (Commodities) at HDFC securities. Views expressed are the author’s personal, please seek advice from your monetary advisor prior to investing.)