By Tapan Patel
Commodity rates traded weak with most of the commodities in Non-Agro segment ended in red for the week except Crude oil. Crude oil rates rallied on sturdy demand outlook in the second half of the year. Bullion rates traded below stress on stronger dollar following robust financial information although base metals fell on worry of policy transform from central banks and weak China demand.
Gold rates traded weak with spot gold rates at COMEX fell by .64% to $1891 per ounce for the week. Gold rates at MCX ended in green at Rs 48,600 per 10 gram as rupee depreciation supported gold rates at domestic industry. The spot rupee fell by .78% against the dollar for the week just after rallying for the 5 weeks on the trot. Gold ETF holdings had been unchanged as holdings at SPDR Gold Shares had been at 1043 tonnes for the week. The CFTC information showed that cash managers enhanced their net lengthy positions by 2943 lots in last week.
Silver rates ended reduced with spot silver rates at COMEX fell by .51% at $27.79 per ounce for the week. MCX Silver July futures ended marginal down to Rs 71,539 per KG. Silver rates witnessed decline following weak industrial metals and fall in valuable metals. The CFTC information showed that cash managers decreased their net lengthy positions by 2765 lots in last week.
Bullion rates traded below stress through the week with gold rates falling from 5 weeks higher on threat-on sentiments. The valuable metals rates declined just after sturdy US manufacturing information raised industry expectations of unwinding of stimulus measures. The US private job industry information came reduced than industry forecasts which supported bullion rates to pare some weekly losses. The stronger than anticipated information lifted financial development outlook which pushed dollar index and bond yields larger. The dollar index ended firm above 90 mark with .12% gains although US 10 year treasury yields ended at 1.55% just after hitting 1.64% through the week. The lesser than anticipated US non-farm payroll information signalled lengthy way for financial recovery maintaining FED’s hands tied to transform monetary policy.
We anticipate gold rates to trade sideways to up in the coming week with COMEX spot gold resistance at $1940 per ounce and assistance at $1850 per ounce. At MCX, Gold August rates have close to term resistance at Rs 49,200 per 10 grams and assistance at Rs 48,000 per 10 gram. COMEX silver spot has close to term resistance at $28.90 per ounce with assistance at $26.70 per ounce. MCX Silver July has critical resistance at Rs 74,400 per KG and assistance at Rs 69,800 per KG.
(Tapan Patel is a Senior Analyst (Commodities) at HDFC securities. The views expressed are the author’s personal. Please seek the advice of your economic advisor prior to investing.)