By Tapan Patel
Commodity costs traded mixed with bullion costs witnessed recovery for the week halting weekly declines. Crude oil costs extended gains on decrease supplies and greater demand on expensive alternate fuels. Base metals traded weak pressured by demand worries from China more than energy shortage and government restictions.
Gold costs traded greater with spot gold costs at COMEX ended .60% up to $1761 per ounce for the week. Gold December futures at MCX rose by .63% close to Rs. 46286 per 10 gram along with rupee depreciation. The spot rupee ended .85% decrease against the dollar for the week. Gold ETF holdings witnessed outflows as holdings at SPDR Gold Shares declined to 986.5 tonnes from earlier week’s 993 tonnes. The CFTC information showed that cash managers decreased their net lengthy positions by 19471 lots in last week.
Silver costs traded greater with spot silver costs at COMEX ended half a % up at $22.54 per ounce for the week. MCX Silver December futures rose by almost 1% to Rs. 60550 per KG for the week. Silver costs capped upside with decline in base metals on China demand worries. The CFTC information showed that cash managers improved their net lengthy positions by 2618 lots in last week.
Bullion costs witnessed powerful recovery from current lows for the duration of the week ended in green halting the series of weekly declines. The valuable metals had been trading down in the start off of the week with gold traded close to $1730 per ounce on improved expectations of US FED tapering. Bullion costs recovered in the second half of the week supported by fall in US bond yields regardless of of stronger dollar. The further help came from inflation worries with increasing gas and coal costs which may perhaps outcome into greater input expense for the companies or achievable shut downs. The dollar index rose by .76% to 94.04 for the week whilst US 10 year treasury yields fell to 1.46% for the duration of the week. Silver costs at COMEX recovered from powerful help levels of $21.50 in line with gold costs. Gold costs want to break above $1800 to resume uptrend.
We anticipate gold costs to trade sideways to down in coming week with COMEX spot gold resistance at $1790 per ounce and help at $1730 per ounce. At MCX, Gold December costs have close to term resistance at Rs. 46700 per 10 grams and help at Rs. 45800 per 10 gram. COMEX silver spot has close to term resistance at $23.60 per ounce with help at $21.50 per ounce. MCX Silver December has essential resistance at Rs. 63000 per KG and help at Rs. 58000 per KG.
(Tapan Patel is a Senior Analyst (Commodities) at HDFC securities. Views expressed are the author’s personal. Please seek the advice of your monetary advisor ahead of investing.)