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GOLD

Gold prices soared to a three month high on last week, aided by a weaker dollar due to lower than expected US jobs data released for April.

* Gold prices hovered near three month high. In the last week, LBMA spot gold gained 0.64 percent last week while COMEX gold gained 0.37 percent.

* India’s domestic Mumbai spot prices of gold gained 0.42 percent, MCX futures prices eased 0.16 percent during last week.

* Global gold ETFs lost 18.3 tonnes equivalent of USD 1.1 billion, or -0.5% of AUM in April - World Gold Council

* Gold import in India zoomed to $6.2 billion for the month of April due to a surge in domestic demand in March

Gold hover at 3-month high

Gold prices revived in April and the trend has continued through in May. The metal soared to a three month high on 10th May, aided by a weaker dollar due to lower-than-expected US jobs data released for April, pointing to a still relatively weak labour market. Moreover, building inflationary pressures as a result of unprecedented levels of stimulus injected into the global economy, as well as expectations that interest rates will remain close to zero for a longer period provided support to the metal.

Benchmark prices steadied last week

The LBMA spot gold settled higher by 064 percent at USD1842.19 an ounce in the last week. In the meantime, India’s domestic Mumbai spot gold gained 0.42 percent to Rs.47800 per 10 grams.

COMEX gold futures eased few ticks last week and settled at USD1837.90 an ounce shedding 0.37 percent last week. MCX gold futures edged down moderately by 0.16 percent in the last week and closed at Rs.47676 per 10 grams.

India imports USD 6.2 billion gold in April

Gold import in India zoomed to $6.2 billion for the month of April due to a surge in domestic demand, according to the Commerce Ministry data.

Global Gold ETF outflows continue, but slow with gold price strength

The world gold council reported that the Global gold ETFs lost 18.3 tonnes equivalent of USD1.1 billion, or -0.5% of assets under management in April, marking outflows for five of the past six months. However, global outflows slowed significantly, as European funds added assets for the first time since January. Global assets under management (AUM) stand at 3,567 tonnes or USD203.0 billion,1 after slipping below $200 billion for the first time in over a year during March. Since the peak asset levels in November 2020, gold ETF AUM has fallen nearly 14%, with 8% coming from outflows and 6% coming from the gold price selloff in US dollar terms.

The SPDR gold backed ETFs physical holdings increased so far in May after a seventh monthly outflows till April. The physical holdings of gold backed ETFs with SPDR gold trust added up by 0.71 percent so far in May after declining 1.97 percent in April. The total physical holdings with SPDR is around 32.93 million troy ounces in the week ended May 14.

Money Mangers add net longs in COMEX Gold F&O

The hedge funds and money managers increased their bullish and reduced bearish positions in COMEX gold contracts in the week ended May 14, and the net longs in gold contracts increased as reported by the U.S. Commodity Futures Trading Commission (CFTC).

Outlook

International Gold: Recovery momentum may continue as prices remain supported by feeble US economic releases and a softer dollar. Raising worries over conflicts between Israel and Palestine and second wave of coronavirus infections in many counties too lifts the safe haven appeal of the yellow metal. Anyhow, for medium to long term prospect, prices may held choppy with limited upside as its key fundamentals likely to put pressure on prices.

Domestic Gold: A firm overseas prices and a weak domestic currency likely to support domestic gold in the immediate run.

Technical View: London Spot: While prices stay above $1800 expect rallies to continue with stiff resistance is seen at $1880 followed by $1920 levels later. A close below $1765 is required to negate the short term bullish expectation and take prices lower.

MCX: As long as Rs 47200 hold the downside, expect the momentum to continue in the near term. However, an unexpected drop below Rs 46000 is a sign of weak momentum.

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