The commodities market experienced positive momentum the whole week, with the exception of gold, with most commodities posting weekly gains ranging from 1.5% to 3.0%. Due to traders locking in their profits during the recent advance, gold prices gave up all of their weekly gains and ended up slightly lower last week. As traders monitored supply limitations following a recent production cut imposed by OPEC and its allies, crude oil prices rocketed to a five-month high and increased by more than 2.50% for the week. Prices for natural gas increased for the first time in a week after falling for the previous three. As investors considered the likelihood of additional stimulus in China, the world’s largest consumer, base metal prices increased last week.
Gold prices reduced weekly gains on Friday as the preliminary April report from the University of Michigan showed that US near-term inflation expectations increased in early April by the most in over two years. The Federal Reserve is expected to continue with aggressive monetary tightening as a result of the inflation statistics, which led to a rise in the US dollar and yields while speculators locked in profits and a sell-off in yellow metal following the data. At its upcoming meeting in May, the Fed is still anticipated to execute a further rise in order to significantly reduce inflation. Following Friday’s data, the markets now predict a 78% chance of a further 25-bps increase in May.
Prior Comex gold prices rose to a 13-month high, driven by demand for safe-haven assets. In the domestic market, 10 grammes of MCX Gold futures reached a new record high of Rs 61,371. Exchange-traded funds backed by gold have once again seen investor buying in recent weeks, increasing holdings to levels not seen since late January. A strong investor demand drove Comex Silver prices to a 12-month high and a sixth consecutive weekly rise. To end the week, MCX Silver May futures closed 1.48 percent higher at Rs 7567 per kilogramme. A total of 939,701 ounces were added to Comex silver ETF holdings on Thursday, bringing year-to-date gains in the ETF by 0.7%.
Gold has recovered around 10% from its low point in February, but it appears that bullish momentum is going to slow down a bit, and a brief fall in gold prices cannot be ruled out. Resistances for Comex spot gold are at $2040 and $2075 per ounce, while supports are at $1980 and 1935. Supports are located at Rs. 59780/59300 per 10 grammes for the MCX Gold June future, while resistances are located at Rs. 61080/62300 per 10 grammes. Support for Comex Spot Silver is at $23.70 per ounce, while resistance is at $ 26.95 per ounce. For the upcoming week, the MCX Silver May future price will encounter resistance around Rs 77,940/78,700 per 1kg and find support at Rs 73,600/72,480 per 1kg.
