Commodity rates traded mixed throughout the week passed by with Bullion rates witnessed decline for the second week with threat on sentiments. Base metals continued to trade greater with Nickel rallying the most followed by Copper and Lead on a robust demand outlook. Crude oil rates traded greater on demand, development prospectus.
Gold rates traded down with spot gold rates at COMEX ended at $1769 per ounce for the week. Gold rates at MCX fell by 1.67% to Rs 46,737 per 10 gram pressured by sharp rupee appreciation. The spot rupee rallied by 1.25% against the dollar for the week. Gold ETF holdings continued outflow as holdings at SPDR Gold Shares declined to 1017 tonnes from earlier week’s 1020 tonnes. The CFTC information showed that cash managers decreased their net extended positions by 6146 lots in last week.
Silver rates traded weak with spot silver rates at COMEX ended marginal down to $25.92 per ounce for the week. MCX Silver May futures fell by more than 1% to Rs 68,423 per KG. The CFTC information showed that cash managers enhanced their net extended positions by 2923 lots in last week.
Bullion rates traded decrease throughout the week as rates struggled to break crucial resistance levels. Precious metals rates traded weak with dollar recovery and rise in US bond yields. The robust US GDP numbers pressured bullion rates to trade down regardless of of expanding FED balance sheet and an additional stimulus from the Biden administration. The dollar index rose above 91 mark gaining .46% even though US 10 year treasury yields rallied to 1.62% throughout the week recovered from current lows of 1.55%. The international vaccine rollouts have enhanced customer self-assurance and led to stronger than anticipated financial recovery which has capped upside in valuable metals cornering inflation issues.
We anticipate gold rates to trade sideways to down in the coming week with COMEX spot gold resistance at $1800 per ounce and help at $1750 per ounce. At MCX, Gold June rates have close to term resistance at Rs 47,500 per 10 grams and help at Rs 46,200 per 10 gram. COMEX silver spot has close to term resistance at $26.80 per ounce with help at $25.20 per ounce. MCX Silver July has significant resistance at Rs 69,800 per KG and help at Rs 66,800 per KG.
(Tapan Patel is a Senior Analyst (Commodities) at HDFC securities. The views expressed are the author’s personal. Please seek the advice of your economic advisor ahead of investing.)