Commodity prices traded positive on Monday with bullion and base metals prices traded positive in absence of US markets supported by soft dollar index. The dollar index ended marginally down for the day, providing support to the commodity prices. Here is a look at how different commodities are behaving in today’s market.
Outlook: Bullion
Bullion prices traded higher with spot gold prices at COMEX was trading near $1,840 per ounce paring some previous loses while spot silver prices at COMEX was trading with over 1% gains at $25.24 per ounce in the morning trade. Bullion prices traded higher on stimulus hopes from Biden administration ahead of US Treasury secretary Janet Yellen’s testimony. The pandemic concerns with rising cases of new virus strain in the UK and France may keep risk premium up in precious metals. We expect bullion prices to trade sideways to up for the day.
Trading Strategy:
MCX Gold February resistance for the day lies at Rs. 49,200 per 10 grams with support at Rs. 48,600 per 10 grams.
MCX Silver March support lies at Rs. 63,500 per KG, resistance at Rs. 67,000 per KG.
Outlook: Crude Oil
Crude oil prices traded mixed with benchmark NYMEX WTI crude oil prices were hovering above $52 per barrel keeping the narrow trading range. Crude oil prices are looking for fresh triggers on mixed fundamentals over demand worries and lower supplies. Crude oil prices may get some support on expectations of further stimulus measures from US administration. Crude oil prices are expected to trade sideways to up for the day on broad buying in commodities.
Trading Strategy:
MCX Crude Oil February support lies at Rs. 3,780 per barrel with resistance at Rs. 3,890 per barrel.
Outlook: Base Metals
Base metals traded firm on Tuesday with Zinc and Copper prices were trading with modest gains while Nickel prices kept to flat trading range in the morning trade. Base metals traded up on dollar decline and expectations of higher stimulus from US to support economic recovery. The recent round of positive economic data from US and China have supported base metals to find support. We expect base metals to trade sideways to up for the day.
Trading Strategy:
MCX Copper January support lies at Rs. 605 and resistance at Rs. 612.
MCX Zinc January support lies at Rs. 212, resistance at Rs. 218.
MCX Nickel January support lies at Rs. 1,290 with resistance at Rs. 1,350.
(Tapan Patel is a Senior Analyst (Commodities) at HDFC Securities)
By Ravindra Rao
MCX Gold February futures witnessed rebound after testing the lower band of the consolidation range of Rs 48,600-49,600. Meanwhile price is trading below the 5 day EMA (49,100) and 21 day EMA (49,680), which could be the key resistance zone for the day. On the downside Rs 48,450 holds key support as 200 day EMA and 78.6% Fibonacci retracement coincides. Only a failure to hold the support would drag the prices further down towards Rs 48,050. On the momentum front RSI is trading below 50 (40) suggesting sideways move. Price expected to move in the band of Rs 48,600-49,450 with sideways trend.
Strategy:
Buy MCX Gold Feb at Rs 48,700 with a target of Rs 49,400 and a stop loss at Rs 48,400.
MCX Silver March continued to move in a sideways range of Rs 64,100-66,700 since the last few sessions. Meanwhile price is trading below the 21 day EMA (66,600), which could be the key resistance for the day. Similarly on the downside key support holds around Rs 64,100, followed by Rs 63,140 (61.8% Fibonacci level). On the momentum front RSI is hovering near 44 suggesting sideways to weaker trend. For the day price is expected to move in the band of Rs 64,100-66,700 with a sideways bias. However close above Rs 66,700 would trigger more buying.
Strategy:
Buy MCX Silver Mar at Rs 65,000 with a target of Rs 66,500 and a stop loss at Rs 64,100.
(Ravindra Rao is VP-Head Commodity Research at Kotak Securities)
