The rally in the dollar index triggered promoting in valuable metals on Friday regardless of a fall in bond yields and weaker equity indices. Image: Reuters
By Tapan Patel
Commodity rates traded volatile through the week passed by with most of the commodities in non-agro segments witnessed promoting. Crude oil rates managed to finish in green when base metals traded weak on demand development issues. Bullion rates pared weekly gains in the second half of the week with rally in dollar index. The dollar index rose by .75% for the week in a uncommon move against widening deficit and larger stimulus.
Gold rates traded reduced with spot gold rates at COMEX ended down by more than 1% to $1828 per ounce losing its shine for the second week of the year. Gold rates at MCX ended more than half a % down to Rs. 48704 per 10 grams for the week. The spot rupee appreciated by .24% against the dollar for the week. Gold ETF holdings witnessed outflows as holdings at SPDR Gold Shares fell to 1177.63 tonnes through the week from prior week’s 1182 tonnes. The CFTC information showed that dollars managers decreased net lengthy positions by 46859 lots in the final week.
Silver rates plunged for the second week with spot silver rates at COMEX fell by 2.57% to $24.77 per ounce for the week. MCX Silver March futures ended in green by .83% to Rs. 64764 per KG regardless of promoting in COMEX rates. The CFTC information showed that dollars managers decreased their net lengthy positions to seven week low by 43395 lots in final week.
Bullion rates traded down for a different week on powerful investors’ appetite for dollar. The rally in the dollar index triggered promoting in valuable metals on Friday regardless of a fall in bond yields and weaker equity indices. The traders and investors engaged in a roller coaster ride through the week on mixed international cues. The expectations of more stimulus announcements from the Biden administration and ultra-low interest prices from US FED kept most of the downside restricted in bullion rates through the week.
We anticipate bullion rates to trade sideways to down for brief term with COMEX spot gold obtaining resistance close to $1870 per ounce and assistance at $1800 per ounce. At MCX, Gold February rates have close to term resistance at Rs. 49700 per 10 grams and assistance at Rs. 47900 per 10 gram. COMEX silver spot has close to term resistance at $26.70 per ounce with assistance at $23.50 per ounce. MCX Silver March has vital resistance at Rs. 67500 per KG and assistance at Rs. 62000 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 economic advisor just before investing.)