The CFTC information showed that dollars managers elevated net lengthy positions to seven week higher by 1091 lots in the final week.
By Tapan Patel
Commodity rates traded greater through the week passed by with most of the commodities in Non-Agri segment witnessing robust purchasing on weaker dollar on stimulus hopes. The dollar index fell by more than 1 % to 90 mark for the week. Gold rates traded greater and ended constructive for the week with spot gold rates at COMEX rallied by 2.39% to $1881 per ounce. Gold rates at MCX rose by 2% to Rs 50304 per 10 grams as stronger rupee capped upside through the week.
The Gold ETF holdings continued to decline as holdings at SPDR Gold Shares fell to 1168 tonnes on Friday. The CFTC information showed that dollars managers elevated net lengthy positions to seven week higher by 1091 lots in the final week.
Silver rates rallied, reporting the highest gains amongst non agro commodities with spot silver rates at COMEX ended up by 7.70 % to $25.81 per ounce. MCX Silver March futures gained by 6.55 % to Rs 67907 per KG in line with robust worldwide peers for the week. Money managers boosted net lengthy positions to 3 week higher by 43667 lots as per information published by CFTC. Silver rates extended gains on robust demand optimism in industrial metals from China along with demand for valuable metals.
Bullion rates witnessed breakout above quick term resistance of $1876 in COMEX spot gold and $25 in COMEX Silver spot rates respectively. The accommodative stance type US FOMC with ultra low interest prices boosted purchasing in valuable metals. The increasing hopes for US relief package pushed dollar index down under 90 mark through the week. The surge in COIVD-19 circumstances across planet and lockdown measures in UK, Europe and some components of US may possibly retain threat premium higher in bullion rates.
We anticipate bullion rates to trade in existing variety with bullish bias for quick term with COMEX spot gold obtaining robust resistance close to $1890/1910 per ounce and assistance at $1850 per ounce. At MCX, Gold February rates have close to term resistance at Rs 50800 per 10 grams and assistance at Rs 49500 per 10 gram. COMEX silver spot has close to term resistance at $26 and $27.50 per ounce with assistance at $24.60 per ounce. MCX Silver March has crucial resistance at Rs 69500 per KG and assistance at Rs 65000 per KG.
(Tapan Patel is a Senior Analyst (Commodities) at HDFC securities. The views expressed are the author’s personal. Please seek advice from your investment advisor just before investing)