Bulls return to the Commodities market

In the previous week, bulls were seen returning to the Comex after weeks of directionless trading and mixed sentiments, with all base metals including Aluminum (2.5%), Copper (2.7%), Lead (1.4%) , Zinc (2.2%) and Iron ore (1.7%) ending in green and starting new possible uptrends. Precious metals, gold and silver were no exceptions and both experienced significant buying pressure.

Gold and Silver prices showed an up move as interest in investing in bullion as a hedge against inflation and possible correction in the equities markets continued to increase amongst investors. All eyes are currently on the US markets as Joe Biden has guaranteed increased expenditure on clean energy and electric vehicles under the new stimulus. This is set to further benefit the commodities prices as demand for base metals and bullion might increase. The dollar and US bond yields, however, managed to hold firm, keeping pressure on commodities.

Crude Oil prices continued with its sideways movement and remained range bound throughout the past week. The volatility is the result of a few factors like increased concerns related to renewed lockdowns in parts of the world to curd rising Covid-19 cases, OPEC+ extending output cuts to April 2021 and better-than expected economic forecast from Federal Reserve backed by vaccine drives. The prices are expected to remain choppy in the coming week however a bias might be on the downside owing to a higher supply and weakening demand concerns. 

For the current week, we expect gold and silver to trade in sideways and remain range bound throughout the week. Investors are advised to closely track the USD-INR rates as a correction in dollar can act in the favour of bullion prices and might lead to a new uptrend. Weakness in the Indian markets and a selloff is also set to be positive for the prices. However, increasing US Bond yields due to strong economic data and rising inflation can dampen this new found momentum in the commodities market.

For the week, we expect gold in COMEX market to be in the range of $1696 to $1,823, while silver is expected to be in the range of $24.1 to $25.9. Whereas, for bullion market traders, we assume gold futures to trade in the range of 45,738 to 47,982.

Page8, NavGujarat Samay, 13th April’21

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