By Tapan Patel
Commodity costs traded reduced with most of the commodities in the non-agro segment witnessed sell-off following dollar rally. Bullion costs recorded the worst day on Friday extending the weekly decline post US payroll information. Crude oil costs reported worst weekly decline in nine months whilst base metals followed weak worldwide cues on-demand development issues.
Gold costs ended reduced with spot gold costs at COMEX fell by 2.82% to $1763 per ounce for the week reporting the worst week in last two months. Gold October futures at MCX plunged by by 2.52% at Rs 46640 per 10 gram along with rupee appreciation. The spot rupee ended about .35% stronger against the dollar for the week. Gold ETF holdings witnessed outflows as holdings at SPDR Gold Shares fell to 1025 tonnes from prior week’s 1031 tonnes for the week. The CFTC information showed that revenue managers improved their net lengthy positions by 851 lots in last week.
Silver costs declined with spot silver costs at COMEX fell by 4.55% to $24.33 per ounce for the week. MCX Silver September futures loses 4.20% to Rs 65000 per KG. Silver costs traded below stress on stronger dollar and promoting base metals on weaker demand outlook on increasing COVID worries. The CFTC information showed that revenue managers improved their net lengthy positions by 4709 lots in last week.
Bullion costs witnessed sell off in the last trading day on much better than anticipated rise in US Job numbers which fuelled expectations of sooner FED tapering. The US Federal Reserve Vice Chairman earlier stated that Fed might look to raise interest prices sooner than 2023. The US July job marketplace report exceeded expectations reflecting opposite of the trend signalled from ADP numbers. The hawkish stance from Fed vice chair has raised marketplace expectations that Fed might quickly unveiled some timeline to unwind bond getting programme. The US 10 year treasury yields ended at 1.30% recovering from the lows of 1.12% of the week. The dollar index rallied by .68% to 92.80 taking toll on commodities. However, increasing worries more than the rapid-spreading Delta variant might limit the downside in valuable metals.
We anticipate gold costs to trade reduced in coming week with COMEX spot gold resistance at $1800 per ounce and assistance at $1750 per ounce. At MCX, Gold October costs have close to term resistance at Rs. 47600 per 10 grams and assistance at Rs 46000 per 10 gram. COMEX silver spot has close to term resistance at $26.30 per ounce with assistance at $23.50 per ounce. MCX Silver September has crucial resistance at Rs 68000 per KG and assistance at Rs 63500 per KG.
(Tapan Patel is a Senior Analyst (Commodities) at HDFC securities. Views expressed are the author’s personal. Please seek advice from your economic advisor prior to investing.)