Gold prices posted first weekly negative close in a 9-week, hit a weekly low of $1874.2 before ending the week with a loss of about $110(5.3%) from a weekly high of 2060,8 at $1949.8 an ounce.
Silver too fell catastrophically, settled the week $26.08(-5.2%) after hitting a weekly low of $23.58.
Prices in domestic markets followed a similar trend. Gold lost 2562(4.7%) to close at Rs52227 per 10 grams while Silver settled the week with a loss of 6989(9.5%) at Rs67171.
Russia’s announcement of the successful launch of the Covid-19 vaccine led to massive correction and long liquidation in precious metals on Tuesday, prices of gold lost more than $150 in less than 48 hours and afterward turned sideways in $1910-$1960 band.
Friday’s Better than expected U.S. economic numbers eased economic concern and a drop in the U.S. inflationary expectations also weighed on the prices.
U.S. July retail sales ex-autos rose +1.9% m/m, stronger than expectations of +1.3% m/m. July manufacturing production rose +3.4% m/m, stronger than expectations of +3.0% m/m. Also, the Aug University of Michigan U.S. consumer sentiment index unexpectedly rose +0.3 to 72.8, stronger than expectations of -0.5 to 72.0.
U.S. 10-Year bond yield jumped last week, closed near 0.70% from a two-week ago level of below 0.50%, which is negative for gold.
Gold is still having support from worsening the Covid-19 pandemic as it continues to negatively impact global economic growth.
In the last release, we mentioned about likely correction the shiny metals as long as their recent record highs are not taken out. We reiterated the same view for this week as well. We expect the corrective wave to continue in near-term as long as gold and silver prices are trading beneath $2078 and $29.92 respectively. Wild volatility will be new normal for some time now.