Brent Prices Commenced Its Downtrend Due To Ease in Production Curbs

In the previous week, base metals witnessed a steep fall in the prices, with aluminum and copper falling by approximately 2% each and zinc lost 1.5%. However, lead witnessed net buyers during the week, and managed to close in green, snapping the losses of past two weeks, gaining 0.2%. As far as precious metals are concerned, gold and silver continued their downtrend, by losing 0.7% and 3.0% respectively during the week.

The prices of precious metals took a hit during the week as a surge in vaccine roll-outs all over the world has lifted the investors’ sentiments. Moreover, surge in US bond yields and a stronger dollar also weighed gold and silver prices. However, the losses were capped after the US President Joe Biden announced ‘”once-in-a-generation” infra investment plan of more than USD 2 trillion in transportation, telecoms and energy infrastructure, which had a positive impact on gold prices as it is often considered as hedge against inflationary pressure.

Brent prices rose during past week, after the release of lower US crude oil inventories data and on the hopes that the OPEC+ members will maintain the production cut till May. However, in the current week, the prices have started to fall after the OPEC+ agreed last week to gradually ease production curbs by 350,000 barrels per day (bpd) in May, another 350,000 bpd in June and further 400,000 bpd or so in July.

For the current week, we expect the gold and silver prices to trade in sideways to positive trend supported by weak equity markets ahead of COVID-19 fears. The prices of precious metals might also be supported by the inflationary pressure in the US markets due to infra investment plan unveiled by the US government.

For the week, we expect gold in COMEX market to be in the range of $1,672 to $1,821, while silver is expected to be in the range of $23.7 to $25.4. Whereas, for bullion market traders, we assume gold mini futures to trade in the range of 44,698 to 46,197.

Page 8, NavGujarat Samay, 6th April’21

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