By Saumil Gandhi
In the prior week, buying support was mostly seen in gold and silver amid mixed global cues. Comex gold registered its first weekly gain in four weeks, helped by weak manufacturing data from the US and Europe and a pullback in the US 10-Year Treasury Yield. On the other side, crude oil prices rebounded from multiweek lows, supported by a substantial decline in global oil stockpiles over the last month, but concern about global economic growth remains a headwind for prices. While base metal prices surged during the preceding week as China eased mortgage policies, halting the residential property slump.
Meanwhile, Powell signalled that the Fed would raise rates if needed in a speech Friday at the US central bank’s annual conference in Jackson Hole. Hawkish remarks from the Fed chair pushed the dollar index to a multiweek high.
The silver commodity, which has acted equally between bullion and industrial metal, closed with an increase of 6.49 percent near the level of $24.22. Money managers have flipped to bullish from bearish on silver as long positions outnumbered short ones by 1,479, weekly CFTC data on futures and options show. Long-only positions rose 5,158 lots to 36,710 in the week ending Aug. 22.
Going forward: This whole week is packed with a bunch of events that could impact the bullion price. The event calendar starts with U.S. confidence data, ADP nonfarm employment change for August, the quarterly GDP data of the U.S., the Chinese manufacturing PMI data, and the U.S. PCE Index number, and the week ends with nonfarm payroll numbers. Thus, we believe both-side volatility is expected for the upcoming week in the bullion pack.
Technical Outlook
From a technical perspective, Comex Gold price and MCX Gold rate (October) are expected to trade in the range of $1880 to $1945 and Rs. 58,180 to Rs. 59,300, respectively. While Comex Silver and MCX Silver (December) are expected to move in the range of $23.10 to $25.35 and Rs. 73,500 to Rs. 76,900, respectively.
(Saumil Gandhi, Senior Analyst – Commodities, HDFC Securities. Views expressed are the analyst’s own. Please consult your financial advisor before investing.)
