Commodity Wrap on September 7: Silver down 1 percent, crude oil futures rise, aluminium trades flat

Gold yesterday settled down by 0.21 percent at Rs 47,425 as the dollar firmed, but renewed bets that the US Federal Reserve may go slow on unwinding its pandemic-driven economic support measures kept bullion close to a 2-1/2-month high," Ajay Kedia, Founder and Director, Kedia Advisory said.

Labor Department data showed U.S. non-farm payrolls increased by 235,000 jobs last month, far below expectations of 728,000. Fed Chair Powell hinted last month that strong jobs recovery was a pre-requisite for the central bank to start paring back its asset purchases. "Some investors view gold as a hedge against inflation that may follow stimulus measures, while lower interest rates reduce the opportunity cost of holding non-yielding bullion," he said.

India's gold imports in August nearly doubled from a year ago to their highest level in five months on an improvement in demand and as a correction in prices prompted jewellers to ramp up purchases for the festive season.

India imported 121 tonnes of gold in August, compared to 63 tonnes a year earlier. In value terms, August imports surged to $6.7 billion from $3.7 billion a year ago. The Perth Mint's sales of gold products in August fell about 24 percent to their lowest level since June 2020.

Sales of gold coins and minted bars in August fell to 53,976 ounces from 70,658 ounces in July and were down 20 percent from a year earlier.

"Technically market is under long liquidation as it has witnessed a drop in open interest by -0.68 percent to settle at Rs 10,109 while prices down -99 rupees. Now Gold is getting support at 47,361 and below the same could see a test of 47,297 levels, and resistance is now likely to be seen at 47,493, a move above could see prices testing 47,561," he said.

Globally, gold prices fell Tuesday, pressured by a resilient dollar and global equities hitting a record high on rising hopes of the US Federal Reserve maintaining an accommodative policy in the near term.

Spot gold was down 0.3 percent to $1,817.51 per ounce, US gold futures were down nearly a percent at $1,815.20.

In the oil market, prices were mixed in quiet trade as some investors scooped up bargains following the recent losses while growing fears over slower demand after Saudi Arabia's sharp cuts to crude contract prices for Asia weighed on sentiment.

Brent crude rose nearly half a percent to $72.53 a barrel and US oil was trading at $69.14, 0.2 percent lower from Friday's close.

"Brent came back as investors adjusted positions, but market sentiment remained weak due to slow demand in Asia and in the United States amid a resurgence of the pandemic," said Tetsu Emori, CEO of Emori Fund Management told Reuters. "In order for WTI to move above $70 a barrel, we need some fresh positive news such as signs of subsiding infection or rising demand of jet fuels," he added.

On MCX, the crude oil was trading nearly a percent higher at Rs 5,071.

The dollar index -- which gauges the greenback against six currencies -- was last trading at 92.23, up 0.21 percent, denting gold's appeal for those holding other currencies. The rupee quoted 0.44 percent higher at 73.39 against the dollar.

The cryptocurrency market was trading broadly in the red Tuesday noon. Bitcoin, the largest crypto by market cap, slumped over a percent and slid below $51,000. Altcoins like Dogecoin and Cardano plunged 10 percent each whereas Ether, Ripple, and Polkadot slip 6 percent. Solana, however, continues to surge, rising over 25 percent in the last 24 hours.

Among metals, copper futures were changing hands at Rs 716, down nearly 1 percent. Nickel was down half a percent, trading at Rs 1,467. However, Zinc was up half a percent and it was trading at Rs 246 and aluminium futures were trading flat at Rs 218.