Gold December contract may continue to trade higher with resistance at Rs 53,500 per 10 gram

Commodity prices regained momentum on US presidential election jitters as most of the non-agro commodities witnessed strong buying during the week passed by. Silver prices rallied the most reporting gains of more than 8 percent for the week followed by Zinc, gold and crude oil. Natural gas prices on the contrary plunged by more than 13 percent during the week. The weaker dollar against major currencies boosted buying in commodities. The greenback fell to 92.23 shedding nearly 2 percent for the week against the major currencies.

Bullion prices rallied on the uncertainty of US presidential elections which has led to public protest in some parts of the US. COMEX spot gold prices gained by nearly 4 percent to $1,951 an ounce crossing a key hurdle at $1940 for the week, reporting the highest weekly run since July 2020. Spot silver prices at COMEX remained highly volatile rallied by more than 8 percent to $25.61 per ounce for the week supported by strong equity indices and positive base metals.

Gold prices pared previous losses recovered from the major support range of $1860 per ounce at the start of the week as fresh lockdown in Europe and US election uncertainty boosted safe-haven buying. Bullion prices gained momentum after polls showed probable victory to Democratic Party candidate Joe Biden which send the dollar index southwards on more stimulus hopes. Joe Biden is set to win the White House race which has raised hopes for economic stimulus and corona aid package. The higher government spending will eventually pressure dollar and will lower the buying cost for precious metals. The US FOMC also kept a loose stance over the urgent need for a relief package as a record surge in virus cases has shaken economic recovery.

The Gold ETF holdings at SPDR gold shares rose to 1,260.20 tonnes from the previous week’s 1,257.67 tonnes. However, the US CFTC data showed that money managers have decreased their net long positions in gold to a 3-week low by 9,658 lots last week while hedge funds decreased their net long position in silver by 326 lots.