The price of gold and silver fluctuates due to concerns about inflation; expect rates to move sideways to increase this week

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Bullion prices remained firm, gold prices hovered around $ 1,760 per ounce throughout the week. (Photo: REUTERS)

By Tapan Patel

Commodity prices traded firm, with most commodities in the nonfarm segment trading higher during the week, supported by a weaker dollar. Crude oil prices rebounded for the sixth week at a trot due to lower supplies and increased demand for expensive alternative fuels. Base metals traded higher following strong stock indexes and the return of Chinese markets despite power shortages.

Gold prices traded weakly, with COMEX spot gold prices ending 0.22% at $ 1757 per ounce for the week. December gold futures on MCX rose 1.62% to Rs 47,037 per 10 grams, supported by the depreciation of the rupee. The spot rupee fell more than 2% to 75 mark against the dollar for the week. The ETF’s holdings of gold continued to cash out as holdings of SPDR gold stocks declined to 985 tonnes from 986.5 tonnes the previous week. CFTC data showed that fund managers increased their net long positions by 25,718 lots last week.

Silver prices traded higher, with COMEX spot silver prices ending 0.61% higher at $ 22.68 per ounce for the week. MCX Silver futures contracts for December rose more than 2% to Rs 61,801 per KG for the week. Silver prices outperformed gold, supported by a rally in industrial metals. CFTC data showed that fund managers increased their net long positions by 1,112 lots last week.

Bullion prices remained firm, gold prices hovered around $ 1,760 per ounce throughout the week. Precious metals remained volatile amid mixed global indices regarding volatile bond yields and concerns about global inflation. Bullion prices rose on Friday amid disappointing US non-farm payroll data, while rising US bond yields leveled off higher. The US non-farm payroll increased by 1,940,000 in September less than expected with an increase of 4,90,000. The dollar index finished flat as 10-year US Treasury yields rose to 1 , 60% Friday. Bullion prices were also supported by rising gas and coal prices, which fueled inflation fears.

We expect gold prices to trade sideways to rise over the coming week with COMEX spot gold resistance at $ 1790 per ounce and support at $ 1730 per ounce. ounce. At MCX, December gold prices have short term resistance at Rs 47,500 per 10 grams and support at Rs 46,700 per 10 grams. The COMEX silver spot has short term resistance at $ 23.60 per ounce with support at $ 21.50 per ounce. MCX Silver December has significant resistance at Rs 63,000 per KG and support at Rs 59,000 per KG.

(Tapan Patel is Senior Analyst (Commodities) at HDFC Securities. The opinions expressed are those of the author. Please consult your financial advisor before investing.)

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