Fundamental News and Triggers

• The gold market is generally in a contango of Rs 600-Rs 700, where future prices are higher than gold spot prices. However, due to tariff uncertainty by the Trump administration, the market has gradually regressed to a backwardation of Rs 150 today.
• Due to a disruption in the global supply chain caused by the movement of precious metals from London to New York, gold spot prices have increased more than future prices during the past month.
• Because bullion banks have been relocating their holdings to America ahead of any potential tariffs, Trump’s tariff threats have caused a great deal of volatility in the Exchange Futures for Physical markets.
• At the same time, market liquidity has been decreasing as banks have been closing out their borrowed EFP positions by selling spot and buying back February CME futures. Lease rates have reached all-time highs as a result of the need for bullion banks to borrow the gold they sold on the spot. This disruption was comparable to the worldwide supply chain that was disrupted by the COVID-19 epidemic in 2020.

 

Technical Triggers

• Gold has given a breakout from its symmetrical triangle, if prices sustain above $2750 (~Rs 79000), we can see further momentum towards $2800 (~Rs 80500) this week.
• Silver prices have given a bullish breakout from its symmetrical triangle pattern by trading above $30.5 (~Rs 92500). If prices sustain above this level, we could see more gains up to $31.3 (~Rs 94500) and $32.3 (~Rs 97500).

 

Support and Resistance

 

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