By Tapan Patel
Commodity rates traded greater for the duration of the week passed by with Bullion rates extended weekly gains following witnessing a minor correction in mid-week. Base metals complicated edged greater recovering from current lows on greater demand optimism. Crude oil rates rallied by more than 4% following sturdy US financial information.
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Gold rates traded greater with spot gold rates at COMEX rose by 1.20% to $1904 per ounce for the week. Gold rates at MCX gained by .29% to Rs. 48542 per 10 gram as sharp rupee appreciation restricted gains at the domestic market place. The spot rupee rose by .55% against the dollar for the week reporting the fifth weekly get. Gold ETF holdings have been unchanged as holdings at SPDR Gold Shares have been at 1043 tonnes for the week. The CFTC information showed that cash managers enhanced their net extended positions by 20007 lots in last week.
Silver rates edged greater with spot silver rates at COMEX ended 1.34% up at $27.94 per ounce for the week. MCX Silver May futures rose by .79% to Rs. 71611 per KG. Silver rates outperformed gold for the duration of the week following sturdy shopping for in industrial metals. The gold/silver ratio has declined to 68 so far following hitting record 130 levels. The CFTC information showed that cash managers decreased their net extended positions by 1235 lots in last week.
Bullion rates traded greater with gold rates rallied for the fourth week on the trot following rates breached essential psychological resistance at $1900 per ounce. The inflation worries have been the central point for this week’s bull in the valuable metals. Gold rates are set to report the very best month-to-month gains in 10 months with rise of 8% in the month of May. Bullion rates traded greater paring losses of the year on greater inflation issues with rise in private consumption expenditure and greater PCE numbers. The dollar index ended firmly above 90 mark when US 10 year treasury yields fell to 1.58% for the duration of the week. The valuable metals will get assistance from inflation hedge as central banks are nonetheless in discussion on when to unwind the asset obtain plan which we count on will come no sooner in this year.
We count on gold rates to trade sideways to up in the coming week with COMEX spot gold resistance at $1940 per ounce and assistance at $1860 per ounce. At MCX, Gold June rates have close to-term resistance at Rs. 49200 per 10 grams and assistance at Rs. 48000 per 10 gram. COMEX silver spot has close to-term resistance at $28.90 per ounce with assistance at $26.70 per ounce. MCX Silver July has critical resistance at Rs. 74400 per KG and assistance at Rs. 69800 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.)