Gold, silver price falls as bond yields rise; expect more of the same this week from precious metals

gold, mcx gold, us dollar, us treasury yieldsBullion costs pared the earlier week’s positive factors throughout the week witnessing promoting on risk-on sentiments.
Image: Reuters

By Tapan Patel

Commodity costs traded unstable throughout the week handed by with bullion costs ended decrease whereas crude oil halted latest rally falling again to beneath $60 per barrel. Base metals traded robust with Copper hovering to 9 years excessive on provide deficit and better demand optimism. 

Gold costs traded decrease with spot gold costs at COMEX at $1784 per ounce dropping more than 2% for the week. Gold costs at MCX ended 2.37% decrease at Rs 46,197 per 10 grams in step with world friends and rupee appreciation. The spot rupee ended 0.14% larger towards the greenback for the week. Gold ETF holdings continued to witness liquidation as holdings at SPDR Gold Shares fell to 1,128 tonnes towards the earlier week’s 1,142 tonnes. The CFTC knowledge confirmed that cash managers decreased internet lengthy positions by 22,270 tons in final week with stoop in gold costs. 

Silver costs ended the week with marginal losses with spot silver costs at COMEX fell by 0.26% to $27.29 per ounce for the week. MCX Silver March futures ended 0.15% right down to Rs 69,012 per KG. The CFTC knowledge confirmed that cash managers elevated internet lengthy positions by 1299 tons in final week. 

Bullion costs pared the earlier week’s positive factors throughout the week witnessing promoting on risk-on sentiments. The treasured metals declined with rise in US bond yield and powerful fairness indices boosted by constructive financial knowledge. Bullion price halted six days decline on Friday as costs reversed from assist ranges on inflation hedge and $1.9 trillion stimulus hopes. US Federal Reserve stability sheet rose to a recent file excessive of $7.512 trillion, a $124 billion sequential uptick and highest since May.

We expect bullion costs to commerce sideways to up in the coming week with COMEX spot gold having resistance close to $1820 per ounce and assist at $1760 per ounce. At MCX, Gold April costs have close to time period resistance at Rs 46,800 per 10 grams and assist at Rs 45,600 per 10 gram. COMEX silver spot has close to time period resistance at $28.50/$30 per ounce with assist at $26.20 per ounce. MCX Silver March has essential resistance at Rs 72600 per KG and assist at Rs 67000 per KG.

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

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