Commodity prices traded mixed with most of the commodities in the non-agro segment ended in the green with gold being an exception. Gold prices traded under pressure on stronger dollar while crude oil and base metals recovered on demand growth optimisms. The dollar index traded near two months high on vaccine rollouts and positive economic data. Here is a look at how different commodities are behaving in today’s market.
Outlook: Bullion
Bullion prices traded lower with spot gold price at COMEX was trading over half a percent down at $1821 per ounce while spot silver price at COMEX was trading lower by 1.83% to $26.36 per ounce in the the morning trade. Bullion prices are expected to trade with a bearish bias for the day on stronger dollar while traders are discounting the effect of Jobless claim data to be released in the evening session. We expect bullion prices to trade sideways to down for the day.
Trading Strategy:
MCX Gold April resistance for the day lies at Rs. 47,800 per 10 grams with support at Rs. 47,200 per 10 grams.
MCX Silver March support lies at Rs. 65,800 per KG, resistance at Rs. 69,500 per KG.
Outlook: Crude Oil
Crude oil prices traded higher with benchmark NYMEX WTI crude oil price was trading half a percent up to $55.95 per barrel on Thursday. Crude oil prices are gaining on lower supply fears after OPEC plus nations pledged to keep output cuts in line to overcome surplus from oil market. Crude oil prices were also supported by continuous decline in US inventories and cap on US shale output. Crude oil prices are expected to trade sideways to up for the day on positive global cues.
Trading Strategy:
MCX Crude Oil February support lies at Rs. 4,030 per barrel with resistance at Rs. 4,140 per barrel.
Outlook: Base Metals
Base metals complex traded under pressure on stronger dollar and expectations of lower demand ahead of Chinese holidays. The seasonal holiday effect on manufacturing activities has lowered demand outlook for short term. The slower pace of economic recovery and cash squeeze may limit upside in base metals till mid-February. However, tighter supplies may support Copper prices to limit the downside. Base metals are expected to trade sideways to down for the day.
Trading Strategy:
MCX Copper February support lies at Rs. 592 and resistance at Rs. 598.
MCX Zinc February support lies at Rs. 205, resistance at Rs. 212.
MCX Nickel February support lies at Rs. 1,260 with resistance at Rs. 1,295.
(Tapan Patel is a Senior Analyst (Commodities) at HDFC Securities)
By Ravindra Rao
MCX Gold April futures is consolidating in the range of Rs 47,500-48,300 after breaching the key support of 200 day EMA at Rs 48,500. Meanwhile, key support for Apr future below Rs 47,500 (Previous Bottom), exists around Rs 47,200. On the other hand, price is facing resistance of 5 day EMA (48,300) and Rs 48,500 (200 DEMA). On the momentum front, RSI is trading close to 30, suggesting weakness in the trend. However the oversold condition in gold could limit more downside in the prices. For the day, prices are likely to continue trading in the broad range of Rs 47,500-48,300 with a sideways bias. Only a sustained move below Rs 47,200 would extend the downside.
Strategy:
Buy MCX Gold April at Rs 47,450 with a target of Rs 47,800 and a stop loss at Rs 47,200.
MCX Silver March futures remained in a sideways trend after its decline from the higher band of the rising channel. Meanwhile, price is still trading in the broad rising trend channel with lower bound support near Rs 66,400, followed by Rs 65,050 (Recent Bottom). On the other hand, key resistance exists around Rs 71,500. On the momentum front, RSI has moved towards the midline (52) after hitting the overbought zone. This suggests the price to go further under consolidation before continuing the uptrend. For the day, price is expected to move in the range of Rs 66,400-71,500 with a sideways trend. Only a close below Rs 65,050 would reverse the trend to neutral.
Strategy:
Buy MCX Silver March at Rs 67,300 with a target of Rs 70,400 and a stop loss at Rs 66,200.
(Ravindra Rao is VP-Head Commodity Research at Kotak Securities)
