Gold, silver rates jump for third week straight; expect bullion prices to climb further

The dear metals rallied supported by the weaker greenback and fall in US bond yields whereas merchants and buyers continued their bets on rising inflation worries.
(Picture: REUTERS)

By Tapan Patel

Commodity costs traded blended through the week handed by with Bullion costs rallied on inflation hedge. Base metals complicated continued draw back as China signalled coverage motion to curb rising costs. Crude oil costs declined with progress in Iran nuclear talks including provide stress. 

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 through the week. The spot rupee rose by 0.62% towards the greenback for the week. Gold ETF holdings witnessed inflows as holdings at SPDR Gold Shares rose to 1043 tonnes from the earlier week’s 1028 tonnes. The CFTC knowledge confirmed that cash managers elevated their internet lengthy positions by 11311 heaps final week.

Silver costs led to inexperienced with spot silver costs at COMEX closed half a per cent up at $27.56 per ounce for the week. MCX Silver Could futures ended marginally right down to Rs 71,049 per KG. Silver costs traded below stress evaluate to gold following sell-off in industrial metals after China mulled coverage motion to chill down costs. The CFTC knowledge confirmed that cash managers decreased their internet lengthy positions by 1294 heaps final week. 

Bullion costs traded greater with gold costs reported third weekly achieve with costs going through robust resistance close to $1900 per ounce. The dear metals rallied supported by the weaker greenback and fall in US bond yields whereas merchants and buyers continued their bets on rising inflation worries. The hypothesis over FED minutes and market talks of hawkish Fed stance capped upside in Gold whereas silver costs capped positive factors on weak base metals. Main central banks have warned of upper inflation which can result in ease in stimulus packages. The White Home, on Friday, mentioned it had pared down its infrastructure invoice to $1.7 trillion from $2.25 trillion. The greenback index ended 0.34% down at 90.02 mark whereas US 10 yr treasury yields fell to 1.623% through the week. Bullion costs will get help from inflation hedge whereas liquidation in cryptocurrencies might entice funding into safe-haven property.

We count on gold costs to commerce up within the coming week with COMEX spot gold resistance at $1900 per ounce and help at $1860 per ounce. The break above $1900 might lead costs in direction of $1920 ranges. At MCX, Gold June costs have close to time period resistance at Rs 48,900 per 10 grams and help at Rs 47,800 per 10 gram. COMEX silver spot has close to time period resistance at $28.30 per ounce with help at $26 per ounce. MCX Silver Could has essential 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 writer’s personal. Please seek the advice of your monetary advisor earlier than investing.)