Gold and silver prices fall with the rise in bond yield price

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In the week that passed by, crude oil prices fell back to $60 per barrel on the other hand commodity prices traded volatile with bullion prices ended lower. Copper reached a nine-year high due to supply deficit and higher demand optimism, so did other base metals. Gold prices lost more than 2% for the week and traded lower having spot gold prices at COMEX at $1784 per ounce. At the MCX, Gold prices closed at Rs. 46,197 per 10 grams which was 2.37% lower and in line with its global peers and rupee appreciation. The spot rupee ended up being 0.14% higher as against the dollar for the week. SPDR Gold Shares fell from the previous week’s 1,142 tons to 1,128 tons resulting in the continued liquidation of Gold ETF holdings. Due to the slump in gold prices, money managers decreased net long positions by 22,720 lots as stated by CFTC data. On the other hand, spot silver prices at COMEX fell by 0.26% to reach $27.29 per ounce for the week as the silver prices closed with marginal losses. MCX Silver March futures ended at Rs 69,012 per Kg which was a 0.15% low. As per CFTC, the net long positions were increased by 1299 lots by the money managers last week.

The rise in prices of US bond yields and strong equity indices due to positive economic data led to the decline of precious metals. On Friday, bullion prices halted a six days decline as the prices reversed from support levels on the inflation hedge and $1.9 trillion stimulus hopes. The US Federal Reserve balance sheet reached $7.512 trillion a record high and a sequential $124 billion uptick which is the highest since May.

As the COMEX spot gold has a resistance of close to $1820 per ounce and support at $1760 per ounce, the bullion prices are expected to trade sideways to up in the upcoming week. Gold April prices have a near-term resistance at Rs. 46,800 per 10 grams and support Rs 45,600 per 10 gram at MCX. In the case of silver, the COMEX silver spot has near-term resistance at $28.50/$30 per ounce with support at $26.20 per ounce. The resistance is at Rs 72,600 per kg and support at Rs 67,000 per kg in MCX Silver March.

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