Gold price expected to trade sideways this week; Bullion rates hold firm despite strong dollar

We count on gold costs to commerce sideways to up in coming week with COMEX spot gold resistance at $1800/$1820 per ounce and help at $1750 per ounce.
(Picture: REUTERS)

By Tapan Patel

Commodity costs traded agency with a lot of the commodities within the Non-Agro phase stored agency buying and selling vary for the week.  Bullion costs traded larger regardless of a stronger greenback whereas base metals traded blended hovering within the higher buying and selling vary. Crude oil costs prolonged rally on stalled OPEC plus output determination.

Gold costs traded larger with spot gold costs at COMEX rose by 0.33% to $1787 per ounce for the week, gaining for the second straight week. Gold costs at MCX rose by 0.77% at Rs 47,285 per 10 gram supported by sharp rupee depreciation. The spot rupee continued weekly fall shedding 0.75% towards the greenback for the week. Gold ETF holdings at SPDR Gold Shares remained unchanged at 1043 tonnes for the week. The CFTC knowledge confirmed that cash managers decreased their internet lengthy positions by 3647 tons final week.

Silver costs continued outperforming gold with spot silver costs at COMEX rose by 1.42% to $26.47 per ounce for the week. MCX Silver September futures ended up by 1.83% to Rs 69,118 per KG. Silver costs traded larger supported by a rally in base metals on provide issues and a powerful demand outlook for industrial metals.

Bullion costs traded strongly throughout the week limiting the draw back with a fall in US treasury yields and blended international financial knowledge. The merchants and buyers have been awaiting key US employment knowledge all through the week to gauge FED stance within the subsequent FOMC meet. The US unemployment fee rose by 5.9% in final month towards the forecast of 5.6%. The US 10 yr treasury yields fell to 1.43% throughout the week boosting shopping for in treasured metals regardless of rally in greenback index. Bullion costs additionally obtained help from rising circumstances of Delta variant of coronavirus within the UK and different elements of the world resulting in partial lockdowns. Bullion costs have recovered from latest lows on hypothesis over FED tapering indicators and inflation worries as market gamers are awaiting readability from FED officers. 

We count on gold costs to commerce sideways to up within the coming week with COMEX spot gold resistance at $1800/$1820 per ounce and help at $1750 per ounce. At MCX, Gold August costs have close to time period resistance at Rs. 47800 per 10 grams and help at Rs. 46500 per 10 gram. COMEX silver spot has close to time period resistance at $27.20 per ounce with help at $25.60 per ounce. MCX Silver September has necessary resistance at Rs. 71800 per KG and help at Rs. 67000 per KG.

(Tapan Patel is a Senior Analyst (Commodities) at HDFC Securities. The views expressed are the writer’s personal. Please seek the advice of your monetary advisor earlier than investing.)