In the previous week, bulls continued to dominate the Comex market, on
their way to recover losses during the previous months, with all base metals including
Aluminum (2.1%), Copper (0.2%), Lead (0.5%) and Iron Ore (2.8%) ending in green
and continuing its uptrends, except for Zinc which lost 0.6%. Precious metals,
gold and silver also rose 1.1% and 3.6% respectively.
Gold and Silver prices continued to rise, supported by macro cues. US
bond yields have fallen below 1.6%, US dollar has fallen to two-week lows
against a basket of other currencies and continued inflation concerns after the
reports of robust US retail sales data and a significant drop in weekly jobless
claims, supported the prices. In addition to these, it has come to light that
China has given domestic and international banks permission to import large
amounts of gold into the country, which has aided in increasing gold prices
during the week.
Crude Oil prices rose during the week, after the industry data showed that
the U.S. oil inventories declined more than expected and the Organization of
the Petroleum Exporting Countries (OPEC) raised its outlook for oil demand. The
gains have also been underpinned by signs of a strong economic recovery in
China and the United States, but have been capped by concerns over stalled
vaccine rollouts worldwide and soaring COVID-19 infections in India and Brazil.
We expect the prices to trade sideways due to worsening COVID-19 situation all
over the world, however, it will also depend on the inventories data.
For the upcoming week, prices of precious metals are expected to continue their upward journey as the investors are diverting themselves towards safe haven assets as a result of increasing paranoia regarding the virus spread. We expect gold in COMEX market to be in the range of $1727 to $1,892, while silver is expected to be in the range of $25.2 to $27.7. Whereas, for bullion market traders, we assume gold futures to trade in the range of 46,528 to 49,021.