During the previous week in the COMEX market, prices of base metals such as Aluminum, Zinc, Iron Ore, and Lead continued its downward journey for the second consecutive week. However, Gold and Silver witnessed kind of a volatile weekly session, but gold managed to close almost at par, whereas silver gained marginally by 0.3% as compared to the previous week.
During the week, gold and silver reached highs of $1,874 and $26.1 respectively in the COMEX market, as the US President Joe Biden was preparing to be sworn into office as the 46th President and had declared his intentions to inject more stimulus ($ 1.9 trillion) to the country’s economy, which will revive the economic growth. As a result, the dollar index weakened 0.16% to 90.323 while the yield on 10-year Treasuries held at 1.08%. Gold and silver are considered a hedge against inflation and currency debasement that can result from stimulus measures, which explains the rise in the prices. Additionally, increase in new COVID-19 cases in the US and Canada, has also been supporting the prices of precious metals.
However, during the week, the precious metals prices lost all its gains after the COMEX market witnessed major profit booking by the investors in the following trading sessions. Also, the dollar index gained on the back of better than expected economic data for the US economy, such as Unemployment Claims, Building Permits, Housing Starts, Flash manufacturing and services PMI, which further resulted in the fall of precious metals prices.
For the current week, investors will have to keep a watch on certain global economic data such as US’ CB Consumer Confidence on 26th January, 2021, US’ crude oil inventories, FOMC’s statement and Federal Funds Rate on 27th January, 2021, US’ Advance GDP QoQ, Unemployment claims and goods trade balance on 28th January, 2021. Along with these data, development relating to virus outbreak and vaccine progress, trend in US dollar and more clarity on polices from Biden administration may continue to remain key price determining factor for gold and silver.
In the current week, we expect gold in COMEX market to be in the range of $1,912 to $1,787, while silver is expected to be in the range of $26.9 to $23.3. Whereas, as per our prediction for bullion market traders, gold futures will trade in the range of 46,983 to 51,826.
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