Gold & Silver

Gold Futures end the week in red; investors look for price direction

Rutam V Vora | | Updated on: Dec 04, 2021
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Spot silver down 3.4%, gold slips 1.2% as global price trends remain suppressed

Gold Futures in India and globally ended the week November 29-December 3 in the red, even as fears around the new coronavirus variant - Omicron - persisted in parts of the world. Investors remained unsure of a clear direction for the precious metals.

However, equities indices posted smart gains during the week discounting the impact of the new variant, which has already been reported in as many as 30 countries including the large ones like the US, India, Canada, Brazil, Australia within a span of a fortnight.

After witnessing a volatile last week, bullion paused its upward rally and reversed the trend of a decline to multi-week low levels.

Fast Four Bullion

MCX Futures extend downtrend

MCX Gold Futures for the most active February contract, ended at Rs 47,925 per 10 grams, which is Rs 65 lower from the closing on Monday. However, the prices have been on a slippery ground since the recent peak of Rs 49,510 reported on November 17.

Silver futures erased most of the gains it made in the first half of November. The prices headed south and ended at Rs 61,567 per kg - the levels seen in early October for MCX Silver March contract. Since Monday, silver lost Rs 869.

Spot silver loses 3.4%, gold slips 1.2%

In the spot markets, silver prices (999 purity) fell by over 2,200 a kg to last quote at Rs 60,843 a kg as quoted by India Bullion and Jewellers Association (IBJA). Spot silver had started the week at Rs 63,046 a kg but couldn't sustain the strength.

Similarly, spot gold (999 purity) lost Rs 580 during the week to last quote at Rs 48,124 per 10 grams as quoted by IBJA. The yellow metal has been on a sustained slide since Monday.

International gold, silver steady

International gold has maintained its positive territory at the levels above $ 1780 an oz (oz is equal to approx 28.3 grams). On Friday, CME Gold February Futures last quoted at $ 1783.9, which is about $ 1.3 higher than $ 17.85.2 quoted on Monday. However, from the weekly high levels of $ 1801, yellow metal lost $ 35 to hit weekly lows of $ 1766 but recovered to end the week on a positive note.

CME Silver March contract remained steady with marginal $ 0.37 loss during the week from Monday's closing of $ 22.85 an oz to $ 22.48 an oz on Friday. The Silver Futures range was between $ 23.46-$ 22.03 during the week.

Weekly Bullion Commentary

Analysts believe that Federal Reserve Chief Jerome Powell's hawkish comments to contain inflationery trends, and the spread of the new coronavirus variant is keeping investors on the edge not allowing them to assess a price direction. The sentiment among the retail investors has also taken a toll amidst sliding prices as most of the retail buyers postponed the purchases waiting for prices to stabilise at lower levels. However, with international prices holding support for gold at crucial $1,780 levels, coupled with the Omicron uncertainties, analysts see less possibility for a steeper slide in gold in short-term. However, the prices staying below the psychological level of $ 1,800 gives an indication that suppressed price levels to continue in the near term.

Published on December 04, 2021

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