Bullion prices expected to correct from current level; Gold resistance placed at Rs 61300-61830

Bullion prices expected to correct from current level; Gold resistance placed at Rs 61300-61830

By Saumil Gandhi

After a strong rally in bullion pack prices retreated on Friday on the back of strong US job market data, before that, gold prices had hit a record high briefly touching a high of $2084.0 per ounce but failed to sustain gain and witnessed sharp correction. While Comex’s silver price rallied to a fresh 52-week high, a rally supported by strong investment and industrial demand. Crude oil prices extended loss last week as concern about demand from the top two oil consumer nations US and China and increased supply from some of The OPEC and its alliance members weighed on prices. The natural gas price tumbled around 11% last week amid mild weather and weakening demand from the US. While Base metals prices throughout the previous week consolidated in a lower range as tepid demand in top consumer China and improving supply pressured the market.

Comex Silver price hit a fresh 52-week high of $26.13 per ounce and closed up by 2.44% at $25.66 per ounce. MCX Silver July future price surged to an all-time high of Rs 78292 per 1 kg and settled up by 2.16 % to Rs 77047 per kg for the week. The rally in silver prices is supported by strong investment demand and industrial demand. Silver ETF holdings saw an inflow of 438,365 ounces which resulted in a net purchase tally for the year of 1.8 million ounces.

Looking forward, we expect bullion prices should correct further from the current level after a sharp reversal in price last Friday. On the macro front investors’ focus will be on US Consumer Inflation and consumer sentiment. For this week Comex spot gold has resistances at $2050/$2084 per ounce and supports at $1980/1965 per ounce. MCX Gold June future has resistances at Rs 61300/61830 per 10 grams and supports placed at Rs 60260/59580 per 10 grams. Comex Spot Silver has resistances at $26.19/$27.0 per ounce and supports at $25.17/$24.0 per ounce. MCX Silver July future price face resistance at Rs 78260/78850 per 1kg and find support at Rs 76170/75040 per 1 kg.

(Saumil Gandhi, Senior Analyst (Commodities) at HDFC securities. Views expressed are author’s own.)