By Saumil Gandhi
Major commodities witnessed corrections in the preceding week, with the exception of natural gas futures. Market anxiety over global economic growth and expectations of further rate hikes led to a drop in commodity prices. In bullion packs, both gold and silver prices fell to a fresh three-month low. While crude oil prices dropped more than 3% week on week as recession fears hampered summer demand. The uptick continued in natural gas, and for the week, prices rose about 3.0% as warmer temperatures and lower production boosted the prices. In the base metal complex, LME aluminium registered its biggest weekly drop since February 10, while zinc and copper finished in the red with weekly losses of 2% to 4% in the previous week.
Comex silver price fell to a three-month low, with the price closing down by 7.0% at $22.42 per ounce on a weekly basis. MCX Silver July future price dropped by 6.34% and closed at Rs 68083 per 1 kg.
For the upcoming week, investors will keep their focus on US consumer confidence data and the Fed Chair Jerome Powell’s speech, while US GDP data will be released on Thursday, which could drive further momentum in the bullion pack. We expect the short-term trend of the precious metal to remain sideways to bearish, and market participants can adopt a sell-on-rise strategy. On the technical front, Comex gold price is expected to move in the range of $1910 to $1940. If the price falls below the $1910 level, it could face downward pressure until the $1880 level. Comex Silver price has first support at $21.50, followed by $20.60, which acts as strong support, and resistance at $24.05.
Back home, MCX Gold August future has resistance at Rs 59370 and support at Rs 57470. MCX Silver July contract has resistance at Rs 69820 and support at Rs 65890 this week.
(Saumil Gandhi is a Senior Analyst (Commodities) at HDFC Securities. Views expressed are the author’s own. Please consult your financial advisor before investing.)