The price of gold and silver fall as bond yields rise; expect the same this week from precious metals

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Expect bullion prices to trade sideways higher over the coming week, with COMEX spot gold having resistance near $ 1,820 per ounce and support at $ 1,760 per ounce. ounce.

By Tapan Patel

Commodity prices have traded volatile over the past week, with bullion prices ending lower as crude oil halted the recent rally to fall back below $ 60 a barrel. Base metals traded strong, with copper hitting a nine-year high amid a supply shortfall and increased demand optimism.

Gold prices traded lower with COMEX spot gold prices at $ 1,784 an ounce, losing more than 2% for the week. Gold prices at MCX ended down 2.37% to Rs 46,197 for 10 grams, in line with global peers and the appreciation of the rupee. The spot rupee ended up 0.14% against the dollar for the week. The ETF’s holdings of gold continued to be liquidated as holdings of SPDR gold stocks fell to 1,128 tonnes from 1,142 tonnes the previous week. CFTC data showed that fund managers reduced net long positions by 22,270 lots last week as gold prices fell.

Silver prices ended the week with marginal losses, as COMEX spot silver prices fell 0.26% to $ 27.29 per ounce for the week. MCX Silver March futures closed 0.15% at Rs 69,012 per KG. CFTC data showed that fund managers increased their net long positions by 1,299 lots last week.

Bullion prices reduced the previous week’s gains over the week, indicating the sell off on feelings of risk. Precious metals fell with rising US bond yields and strong stock indexes boosted by positive economic data. Bullion’s price halted its six-day decline on Friday as prices reversed from supporting inflation hedge levels and stimulus hopes of $ 1.9 trillion. The US Federal Reserve’s balance sheet hit a new record high of $ 7.512 billion, a sequential increase of $ 124 billion and the highest since May.

We expect bullion prices to trade sideways to rise in the coming week with COMEX spot gold having resistance near $ 1,820 per ounce and support at $ 1,760 per ounce. . At MCX, April gold prices have short term resistance at Rs 46,800 per 10 grams and support at Rs 45,600 per 10 grams. The COMEX silver spot has short term resistance at $ 28.50 / $ 30 per ounce with support at $ 26.20 per ounce. MCX Silver March has significant resistance at Rs 72,600 per KG and support at Rs 67,000 per KG.

(Tapan Patel is Senior Analyst (Commodities) at HDFC Securities. The views expressed by the author are his own. Please consult your financial advisor before investing.)

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