Bullion prices fall for third week straight on FED tapering talk; expect gold to trade sideways

By Tapan Patel

Commodity costs traded blended with bullion costs witnessed promoting for the week capping upside on greater bond yields. Crude oil costs continued upside on provide crunch with output disruptions and better demand. Base metals traded agency supported by decrease provide whereas capping good points on China property large Evergrande’s debt disaster. 

Gold costs traded weak with spot gold costs at COMEX ended 0.22% right down to $1750 per ounce for the week. Gold October futures at MCX fell ended marginal up close to Rs. 45995 per 10 gram supported by rupee depreciation. The spot rupee ended 0.26% decrease towards the greenback for the week. Gold ETF holdings witnessed outflows as holdings at SPDR Gold Shares declined to 993 tonnes from earlier week’s 1002 tonnes. The CFTC information confirmed that cash managers decreased their web lengthy positions by 25801 heaps in final week.

Silver costs traded regular with spot silver costs at COMEX ended marginal up at $22.42 per ounce for the week. MCX Silver September futures ended flat close to to Rs. 59955 per KG for the week. Silver costs outperformed gold in the course of the week with shopping for from help ranges and agency industrial metals over decrease provide worries. The CFTC information confirmed that cash managers decreased their web lengthy positions by 13178 heaps in final week.

Bullion costs remained fluctuated reporting third weekly decline in a row on FED tapering jitters.  The valuable metals traded greater within the begin of the week on China’s property market debt disaster which raised issues over financial restoration. Bullion costs traded beneath strain paring good points with rally in US bond yields publish US FOMC assembly. The US FED signalled to unwind pandemic stimulus by mid-2022 and to boost key rates of interest by finish of 2022. The greenback index rose by 0.14% to 93.33 for the week whereas US 10 yr treasury yields rose to 1.45% in the course of the week decreasing demand for protected haven property. However, US Fed chairman reiterated inflation worries as inflation was trending above the Fed’s goal of two% every year. 

We anticipate gold costs to commerce sideways to down in coming week with COMEX spot gold resistance at $1790 per ounce and help at $1680 per ounce. At MCX, Gold October costs have close to time period resistance at Rs. 46600 per 10 grams and help at Rs. 45500 per 10 gram. COMEX silver spot has close to time period resistance at $23.60 per ounce with help at $21.50 per ounce. MCX Silver December has vital resistance at Rs. 63000 per KG and help at Rs. 58000 per KG.

(Tapan Patel is a Senior Analyst (Commodities) at HDFC securities. Views expressed are the creator’s personal. Please seek the advice of your monetary advisor earlier than investing.)