Gold, silver prices plunge as US dollar strengthens; bullion rates may trade sideways to down

Bullion costs witnessed sell-off throughout the week on stronger greenback and US FED’s hawkish stance.
(Picture: REUTERS)

By Tapan Patel

Commodity costs traded decrease with many of the commodities within the non-agro phase witnessed promoting besides crude oil.  Bullion costs traded decrease on stringer greenback on US Fed tapering indicators whereas base metals traded weak on China crackdown and weak demand. Crude oil costs prolonged rally on robust gasoline demand restoration type US and Europe. 

Gold costs traded decrease with spot gold costs at COMEX plunged by 6.04% to $1764 per ounce for the week the worst in final 15 months. Gold costs at MCX ended greater than 4% decrease at Rs 46,728 per 10-gram limiting draw back supported by rupee depreciation. The spot rupee fell by 1.07% in opposition to the greenback for the week persevering with draw back. Gold ETF holdings witnessed inflows as holdings at SPDR Gold Shares rose to 1053 tonnes from 1045 tonnes for the week. 

Silver costs joined the selloff in valuable metals with spot silver costs at COMEX shed 7.63% ended at $25.79 per ounce for the week. MCX Silver July futures ended down by 6.41% to Rs 67,598 per KG. Silver costs traded decrease following weak international cues on stronger greenback and promoting in industrial metals.

Bullion costs witnessed sell-off throughout the week on stronger greenback and  US FED’s hawkish stance. The US Federal Reserve signalled, on Wednesday, that it’s going to elevate rates of interest no less than twice by the tip of 2023 to 0.6% from present ranges of zero to 0.25%. The feedback from St. Louis Fed President James Bullard added strain on Friday as he noticed that the central financial institution may need to contemplate elevating rates of interest by subsequent yr as a substitute of 2023. The market will concentrate on FED discussions on when it would begin unwinding the month-to-month asset buy programme. The greenback index rallied by 1.84% to 92.23 reducing demand for safe-haven belongings like gold and silver.

We anticipate gold costs to commerce sideways to down within the coming week with COMEX spot gold resistance at $1800 per ounce and assist at $1720 per ounce. At MCX, Gold August costs have close to time period resistance at Rs 47,500 per 10 grams and assist at Rs 46,000 per 10 gram. COMEX silver spot has close to time period resistance at $27 per ounce with assist at $24.80 per ounce. MCX Silver July has necessary resistance at Rs 70,200 per KG and assist at Rs 65,500 per KG.

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