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
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
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.
During the previous week, both the benchmark
indices, Nifty and Sensex witnessed a highly volatile session, ending the
weekly session in red. Nifty and Sensex traded in the range of 14,459 and
14,882, and 48,580 and 50,092 respectively. During the week, bulls tried to
take control of the market, but failed to do so.
The equity markets witnessed a weakened
investor sentiments due to continuation in rising COVID-19 cases throughout the
world, and especially due to a higher pace of rise in the number of cases in
India. Stringent lockdown rules have been announced by the state governments,
whereas, lockdown period has been extended for the states which were already
experiencing lockdown and night curfew. This has weakened the investors’
However, the investor sentiments were boosted on
Wednesday, after the announcement of RBI Policy, where the bank rates have been
kept unchanged, as a remedy to revive the economy of the country by the way of
liquidity infusion. The MPC committee has been keeping the rates unchanged
since past 5 meetings. Bank Nifty welcomed the Policy outcome with open arms.
As far as sectoral indices are concerned, Nifty
IT, Nifty Metal and Nifty Pharma stocks ended in green during the week, gaining
more than 2% each, whereas, all the other sectoral indices ended the week in
red. Nifty Private Bank, Nifty PSU Bank, Nifty Media and Nifty Financial
Services were the worst performers of the week, losing more than 2% each.
For the upcoming week, the equity markets are expected to react on the new lockdown rules announced by the government and the change in number of COVID-19 cases. If the cases do not subside, the rules might get more stringent and have a negative effect on the equity market. Technically, for Nifty, 14,880 will be a critical level for the week. It should sustain above that level to confirm its bullish trend. On the upper side, it might see 15,300 levels. If it falls below 14,880, we might see it falling to 14,389.