By Tapan Patel
Commodity costs traded decrease with a lot of the commodities within the non-agro phase witnessing decline for the week besides crude oil. Bullion costs traded down on stronger greenback and rise in US bond yields. Crude oil costs rallied greater than 2% for the week on tight provides and better demand amid geopolitical threat. Base metals ended down on China demand worries following strict lockdown and mass testing. The greenback index ended 1.72% up at 102.96 for the week.
Gold costs traded decrease with spot gold costs at COMEX ended 1.79% down at $1897 per ounce for the week. Gold June futures at MCX fell by 0.97% to Rs. 51754 per 10 gram together with rupee appreciation. The spot rupee ended marginally up by 0.07% at 76.43 towards the greenback for the week. Gold ETF holdings witnessed inflows as holdings at SPDR Gold Shares fell to 1094 tonnes from earlier week’s 1104 tonnes. The CFTC knowledge confirmed that cash managers have decreased their internet lengthy positions by 25524 heaps in final week.
Silver costs witnessed heavy promoting with spot silver costs at COMEX plunged by 5.66% to $22.78 per ounce for the week. MCX Silver May futures fell by 4.49% to Rs. 63556 per KG for the week. Silver costs declined with weaker demand for industrial metals amid rising COVID instances in China. The CFTC knowledge confirmed that cash managers have decreased their internet lengthy positions by 14748 heaps within the final week.
Bullion costs reported the second month-to-month loss in 2022, with COMEX spot gold dropping practically 2% for the month April 2022. The valuable metals traded down for the week on a stronger greenback forward of the US FOMC assembly and expectations of bigger charge hike. The greenback index rose by 4.60% in April, its most since January 2015. The merchants and traders are awaiting for subsequent week’s US FOMC assembly after Fed Chair Jerome Powell hinted at two or extra 50 bps charge hikes to tame inflation. The FOMC members are contemplating as many as seven charge hikes this yr and count on financial tightening to proceed into 2023 if inflation doesn’t drop to desired ranges. The geopolitical threat over Russia-Ukraine battle, increased oil costs and China COVID worries are the supporting elements which can restrict draw back in valuable metals costs.
We count on gold costs to commerce sideways to down this week with COMEX spot gold resistance at $1940 per ounce and assist at $1870 per ounce. At MCX, Gold June costs have close to time period resistance at Rs. 52300 per 10 grams and assist at Rs. 50800 per 10 gram. COMEX Spot silver has close to time period resistance at $24 per ounce with assist at $21.40 per ounce. MCX Silver July has vital resistance at Rs. 66500 per KG and assist at Rs. 60800 per KG.
(Tapan Patel, Senior Analyst (Commodities) at HDFC Securities. Views expressed are the writer’s personal.)