Bullion Commodity Advisory Services Analysis we had their share of volatility as they advanced smartly in the initial half of the week as equities across the globe plunged pressed by growth concerns. Dollar index rose while Euro currency plunged to fresh multi-year lows weighed by subdued economic data and political developments in Greece which is facing election later this month and worries remained whether the nation would prefer to stay or leave the EU. Aforesaid problems pulled gold and silver prices higher initially in the last week though the same subsided bit and once again we saw normalization in the broad bearish bias for the two commodities during middle half of the week. However last day’s economic report from the US once again aided the uptick in both gold and silver which closed on a rosy note.
As per major data points on Friday, the US Jobs data and comments from ECB President raised questions over monetary policy stance coming out of their respective monetary policy members in near-term. US Nonfarm payrolls increased by staggering 252,000 in December, followed by an upwardly revised increase of 353,000 in Nov. Jobless rate fell 0.2 percent to 5.6 percent; however the same was likely led by cut in labor force participation. Separately decline in average hourly earnings took the optimism out of the otherwise strong report from US Labor Department and thus supporting gains in the yellow metal.
Talking about the demand aspect for the commodity, Gold imports in India came down heavily in Dec after the government scrapped the so called 80:20 and as huge demand out of festival and marriage season in the country reduced. Gold imports fell to 39 MT in December while were seen near 7 MT in the first week of January, compared to 152 MT in Nov, news reports showed. Subdued demand in the world’s second largest consumer of yellow metal may have modest negative impact on the commodity. On the other major aspect as well, Gold holding by SPDR Gold trust, the world’s largest ETF backed by the Bullion stay muted near the weakest since Sep 2008. After the holdings fell nearly 40 percent in 2013 and extended the drop by 11% in 2014, they still stay weak and as per last quote stood near the 708 MT mark.
Nevertheless, as we said earlier as well, Gold as a commodity takes more cues from macro economic framework rather than its own demand-supply numbers. In the coming week, if equities continue to disappoint and problems over political issues in EU remain we are likely to see extension of this positive rally at-least in the initial half. Onto the currency front the US Dollar is seen largely ranged next week however; it might not be seen as a complete surprise in case we see some correction in the Greenback, especially during the initial half of the week; thanks to the developments on Friday. Still, broadly the USD looks bullish in comparative analysis to the Euro and the Yen and that might act negatively over gold from higher levels. Also we have US CPI/PPI umber to be released where there is a chance for modest negativity, mainly due to lower industrial commodity prices and can further act bearish for the yellow metal which is seen as a hedge against inflation. On the cumulative side, we advise traders be ready for a small pullback in Gold prices in the coming week and later take that opportunity to build short-positions from higher levels
Gold Feb MCX futures prices witnessed volatile movements in the last week, moved in the range of 27449-26668. Prices are expected to trade downside for the week ahead. A stiff resistance is seen at 27200 levels, which is expected to hold the downside view. For short term traders we suggest selling at higher levels.
Gold Commodity Weekly Outlook
Major Resistance on upside at 27100-27500
Major Support on downside at 26200-25800
Silver Weekly Analysis of Commodity Advisory Services Overall, we expect the near similar move as per the directional trade is concerned in the coming week for silver as stated in gold commodity. That is we might see extension of some more gains in the commodity while selling pressure is likely to get build as we move in the second half of the week. However, other than the selling on higher levels stance in silver, we believe the commodity had a fair chance to continue outperform the yellow metal in the coming week as well. Silver outstripped gold by wide margin this week with rebound in select base metals too supporting the gains other than its high beat nature. Silver based on its consumption pattern takes cues both from precious metals and base metals and backed by our study wherein we expect mixed cues from metal in coming week as well; it may continue to largely support the silver commodity. On the same lines, traders may look to plan Gold/Silver Ratio selling wherein we bet that silver’s outperformance over gold would continue
Silver March MCX futures prices witnessed volatile movements in the last week, moved in the range of 38145-36351 levels. For short term traders we suggest selling at higher levels with stop loss above 38200 levels.
Silver Commodity Weekly Outlook
Major Resistance on upside at 37800-38500
Major Support on downside at 35800-35200
Commodity Advisory Services Analysis
Sell Gold Mcx Feb on rise near 26860 sl 27200 Tgt 26650-26500
Sell Silver MCx Mar on rise near 37200 sl 38200 Tgt 36200-35800