Bullion Cues. Gold gets a leg-up

Gold ended with a gain of 0.4 per cent last week at $1,222/ounce. The strong US jobs data on Friday took some sheen off the metal. Platinum closed at $957/ounce, up 0.9 per cent.

Silver ended the week at $15.05/ounce, down 0.8 per cent. Data showed that non-farm payrolls increased by 2,15,000 in March, which was better than the market estimate of 2,05,000.

The average hourly earnings also gained after dropping in February.

The dollar, however, closed the week sharply down. At 94.61, the US dollar index was down 1.7 per cent over last week.

The greenback started to decline after Fed Chair Janet Yellen indicated that the hike in rates will be more gradual than indicated earlier, on concerns over the global economy.

Experts say that a rate hike in April now looks unlikely and see just a 27 per cent chance of the Federal Reserve hiking rates at its June policy meet.

Holdings of the SPDR Gold Trust, which have been inching up since the beginning of the year, recorded a drop.

The week ended with a total holding of 818.09 tonnes, down from 823.74 tonnes in the previous week.

The US calendar is relatively light over the next few days, with just the international trade numbers on Tuesday and minutes of the FOMC meeting held last month.

Thursday will see the release of the jobless claims number. With the Fed’s cautious comments, gold may try to hold up, but any reversal in the dollar can take the sheen off the metal.

This week, gold may try moving up to $1,235/1,240 levels. But further gains will be possible only if the resistance at $1,250/ounce is crossed, else the sideways crawl will continue. On the downside, supports are at $1,200 and $1,194.

In India, gold prices stayed weak as the rupee appreciated against the dollar. It closed at 66.2 against the dollar, up from 66.63 last week. MCX gold futures closed at ₹28,040, down close to 2 per cent. MCX Silver ended a very volatile week at ₹35,922, down 2.04 per cent. Spot prices were quoting at a discount of $20/ounce to global prices. A week ago, discounts were as high as $30/ounce, but with demand improving, prices have moved up.

On Friday, the RBI notified that deposits under the gold monetisation scheme (GMS) may now be redeemed in gold. Earlier, only short-term deposits of one-to-three years gave depositors an option to redeem in gold while medium (five to seven years) and long-term deposits (12-15 years) offered compulsorily cash redemption. The move is aimed at making the scheme more attractive to temple trusts, given it has collected just 900 kg of gold since launch in November last year. Recently, the Tirumala Tirupati Devasthanam (TTD) requested the Centre to give an option of redeeming the long-term deposits made under GMS in gold. In February, TTD is said to have deposited 1.4 tonnes of gold with Punjab National Bank for three years under GMS. However, do note that for redeeming the deposit in gold, there would be an additional charge. This will be 0.2 per cent of the redemption amount and collected in rupees from the depositor.

MCX Gold may inch up this week if the rupee weakens. Else, it may continue to see weakness persist. Supports are at ₹27,000 and ₹26,400. But, if it makes an about-turn, it would target ₹29,500 levels. Resistances are at ₹29,000 and ₹30,000.

MCX Silver may largely track international prices but given that the trend is weak, you need to watch out. ₹35,000 is a strong support which, unless broken, can keep the contract moving sideways. Resistance is at ₹36,600-36,700 levels.

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