By Tapan Patel
Commodity costs traded frim with most of the commodities in the Non-Agro segment ending in green for the week. Bullion costs traded larger on weaker dollar even though base metals rallied on sturdy demand more than US infrastructure push. Crude oil costs extended rally on sturdy fuel demand recovery kind US and Europe.
Gold costs traded larger with spot gold costs at COMEX rose by almost 1% to $1781 per ounce for the week reporting the initially weekly gains considering that May 2021. Gold costs at MCX ended up by .42% at Rs 46,925 per 10 gram supported by rupee depreciation. The spot rupee fell by .44% against the dollar for the week extending downside. Gold ETF holdings witnessed outflows as holdings at SPDR Gold Shares fell to 1043 tonnes from 1053 tonnes for the week. The CFTC information showed that revenue managers decreased their net lengthy positions by 38288 lots in last week.
Silver costs rallied outperforming gold with spot silver costs at COMEX rose by 1.22% to $26.10 per ounce for the week. MCX Silver July futures ended up by .41% to Rs 67,873 per KG. Silver costs traded firm supported by rally in base metals more than sturdy demand outlook for industrial metals.
Bullion costs witnessed firm trading in the course of the week on weaker dollar and US inflation issues. The US Federal Reserve chairman signalled larger inflation and slower FED tapering which supported valuable metals to trade up. The US inflation rose for the third month boosting obtaining in gold more than dollar promoting. The dollar index fell by .41% to 91.85 even though US 10 year treasury yields have been muted close to 1.52% in the course of the week. Bullion costs are anticipated to trade in present variety on lack of fresh triggers as traders and investor will look for the cues on FED tapering of the bond-obtaining programme.
We count on gold costs to trade sideways to up in the coming week with COMEX spot gold resistance at $1800/$1820 per ounce and assistance at $1750 per ounce. At MCX, Gold August costs have close to term resistance at Rs 47,600 per 10 grams and assistance at Rs 46,500 per 10 gram. COMEX silver spot has close to term resistance at $27 per ounce with assistance at $25.10 per ounce. MCX Silver September has crucial resistance at Rs 71,200 per KG and assistance at Rs 67,000 per KG.
(Tapan Patel is Senior Analyst (Commodities) at HDFC securities. Views expressed are the author’s personal. Please seek advice from your economic advisor ahead of investing.)