By Tapan Patel
Commodity rates traded firm with most of the commodities in the non-agro segment trading larger through the week supported by softer dollar. Crude oil rates rallied for the sixth week on the trot on reduced supplies and larger demand on expensive alternate fuels. Base metals traded larger following powerful equity indices and return of Chinese markets in spite of of energy shortages.
Gold rates traded weak with spot gold rates at COMEX ended .22% down to $1757 per ounce for the week. Gold December futures at MCX rallied by 1.62% to Rs 47,037 per 10 gram supported by rupee depreciation. The spot rupee fell by more than 2% to 75 mark against the dollar for the week. Gold ETF holdings continued outflows as holdings at SPDR Gold Shares declined to 985 tonnes from earlier week’s 986.5 tonnes. The CFTC information showed that dollars managers elevated their net extended positions by 25718 lots in last week.
Silver rates traded larger with spot silver rates at COMEX ended .61% up at $22.68 per ounce for the week. MCX Silver December futures rose by more than 2% to Rs 61,801 per KG for the week. Silver rates outperformed gold supported by a recovery in industrial metals. The CFTC information showed that dollars managers elevated their net extended positions by 1112 lots in last week.
Bullion rates kept firm trading with gold rates hovered close to $1760 per ounce all through the week. The valuable metals remained fluctuated on mixed international cues more than volatile bond yields and international inflation worries. Bullion rates gained on Friday on disappointed US Non-Farm payroll information even though surge in US bond yields capped upside. The US Non-farm payroll rose by 1,94,000 in the month of September lesser than anticipated with an enhance of 4,90,000. The dollar index ended flat even though 10 year US Treasury yields rose to 1.60% on Friday. Bullion rates have been also supported by increasing gas and coal rates which has fuelled inflation worries.
We count on gold rates to trade sideways to up in the coming week with COMEX spot gold resistance at $1790 per ounce and assistance at $1730 per ounce. At MCX, Gold December rates have close to term resistance at Rs 47,500 per 10 grams and assistance at Rs 46,700 per 10 gram. COMEX silver spot has close to term resistance at $23.60 per ounce with assistance at $21.50 per ounce. MCX Silver December has significant resistance at Rs 63,000 per KG and assistance at Rs 59,000 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 just before investing.)