By Tapan Patel
Commodity costs traded mixed for the duration of the week passed by with Bullion costs rallied on inflation hedge. Base metals complicated continued downside as China signalled policy action to curb increasing costs. Crude oil costs declined with progress in Iran nuclear talks adding provide stress.
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Gold costs traded greater with spot gold costs at COMEX rose by 2% to $1881.25 per ounce for the week. Gold costs at MCX gained by 1.53% to Rs 48,404 per 10 gram as rupee appreciation capped upside for the duration of the week. The spot rupee rose by .62% against the dollar for the week. Gold ETF holdings witnessed inflows as holdings at SPDR Gold Shares rose to 1043 tonnes from the prior week’s 1028 tonnes. The CFTC information showed that dollars managers elevated their net lengthy positions by 11311 lots last week.
Silver costs ended in green with spot silver costs at COMEX closed half a per cent up at $27.56 per ounce for the week. MCX Silver May futures ended marginally down to Rs 71,049 per KG. Silver costs traded below stress evaluate to gold following sell-off in industrial metals immediately after China mulled policy action to cool down costs. The CFTC information showed that dollars managers decreased their net lengthy positions by 1294 lots last week.
Bullion costs traded greater with gold costs reported third weekly acquire with costs facing powerful resistance close to $1900 per ounce. The valuable metals rallied supported by the weaker dollar and fall in US bond yields although traders and investors continued their bets on increasing inflation worries. The speculation more than FED minutes and industry talks of hawkish Fed stance capped upside in Gold although silver costs capped gains on weak base metals. Major central banks have warned of greater inflation which may well lead to ease in stimulus packages. The White House, on Friday, stated it had pared down its infrastructure bill to $1.7 trillion from $2.25 trillion. The dollar index ended .34% down at 90.02 mark although US 10 year treasury yields fell to 1.623% for the duration of the week. Bullion costs will get help from inflation hedge although liquidation in cryptocurrencies may well attract investment into secure-haven assets.
We anticipate gold costs to trade up in the coming week with COMEX spot gold resistance at $1900 per ounce and help at $1860 per ounce. The break above $1900 may well lead costs towards $1920 levels. At MCX, Gold June costs have close to term resistance at Rs 48,900 per 10 grams and help at Rs 47,800 per 10 gram. COMEX silver spot has close to term resistance at $28.30 per ounce with help at $26 per ounce. MCX Silver May has critical resistance at Rs 73,800 per KG and help at Rs 68,800 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 ahead of investing.)