New Delhi (IANS) The metal market is again on an upswing with futures of both precious and base metals on the rise largely on the hopes of the proposed massive $1.9 trillion stimulus package in the US along with improving demand.
Earlier this month, the US House of Representatives already approved a budget resolution that would allow Congress to pass President Joe Biden's $1.9 trillion Covid-19 relief package without Republican support.
Kshitij Purohit, Product Manager for Currency & Commodities with CapitalVia Global Research Ltd. said that the economic package will lead to weakening of the dollar and investments would flow into the safe haven assets of gold and silver.
Silver futures in the domestic market are currently trading above Rs 70,000 per kg due to the weak dollar and hopes of further stimulus in the US.
The March contract of silver on the Multi Commodity Exchange (MCX) is currently trading at around Rs 70,401 per kg, higher by Rs 272 or 0.39 per cent from its previous close.
Purohit was of the view that futures of silver may touch Rs 73,000 per kg in the near term after the stimulus package is passed in the US Congress and comes into effect. Further, in the mid-term, it may touch the Rs 80,000 per kg mark, he said.
On gold futures, analysts said that supply of the yellow metal has been smooth, but demand is yet to pick up including the demand for the marriage season in India.
Analysts, however, noted that the downside in gold futures will be capped by the weak dollar.
Purohit of Capital Via further said that the 10-year bond yield in the US is elevated currently and is likely to rise further which would support the dollar index.
"Dollar and 10-year bond yield of the US both are the key drivers in short term in the determination of the price of gold and silver," he said.
Futures of base metals too have been on the rise off late, largely on the improving demand along with supply concerns.
Metals have largely been on the rise on hopes of economic rebound and infrastructure development globally.
The February contract of aluminum on the MCX is currently trading at Rs 167.45 kg, higher by 0.18 per cent. The February copper contract on the MCX, is trading 0.16 per cent lower at Rs 643.80 per kg.