Commodity prices traded mixed on Tuesday with most of the commodities in the non-agro segment traded firm for the day. Base metals complex witnessed strong buying with copper rallying the most. Bullion prices continued moving upside supported by weaker dollar which fell by over half a percent for the day. Here is a look at how different commodities are behaving in today’s market.
Outlook: Bullion
Bullion prices traded higher for the fourth day with spot gold price at COMEX was trading near $1,845 per ounce while spot silver price at COMEX was trading at $27.38 per ounce in the morning trade. Bullion prices continued upside move on US stimulus hopes and dollar decline. We expect bullion prices to trade sideways to up for the day.
Trading Strategy:
MCX Gold April resistance for the day lies at Rs. 48,200 per 10 grams with support at Rs. 47,800 per 10 grams.
MCX Silver March support lies at Rs. 68,000 per KG, resistance at Rs. 72,500 per KG.
Outlook: Crude Oil
Crude oil prices halted gains with benchmark NYMEX WTI crude oil price was trading marginally down at $58.31 per barrel on Wednesday. Crude oil prices traded steady near the resistance level despite of weekly inventory draw. The signs of supply tightness may support oil prices to trade firm in the near term. Crude oil prices are expected to trade sideways to up for the day.
Trading Strategy:
MCX Crude Oil February support lies at Rs. 4,190 per barrel with resistance at Rs. 4,320 per barrel.
Outlook: Base Metals
Base metals complex traded positive as most of the metals witnessed buying on Wednesday with Copper gaining the most. Base metals prices gained on weaker dollar and stimulus hopes along with lower supply from China on Lunar day holidays. Copper prices continued upside on demand growth prospect with supply crunch in the spot market. Base metals are expected to trade sideways to up for the day.
Trading Strategy:
MCX Copper February support lies at Rs. 632 and resistance at Rs. 640.
MCX Zinc February support lies at Rs. 213, resistance at Rs. 219.
MCX Nickel February support lies at Rs. 1,310 with resistance at Rs. 1,360.
(Tapan Patel is a Senior Analyst (Commodities) at HDFC Securities)
By Ravindra Rao
MCX Gold April future moved in a narrow range after retracing 50 per cent of the recent decline. However, on the daily charts price has closed above the bullish inside candle pattern at Rs 47,673 along with the 5 day EMA (47,670) which has strengthened the recovery. The recovery in the Gold futures got support from the reversal in RSI as well. The strength index has moved above 40 after testing the oversold zone of 20, which suggests a recovery phase in gold might be on. Now the key resistance for price exists around Rs 48,450 (200 DEMA), which could be the target in the near term. Going by the above analysis price is expected to move in the band of Rs 47,600-48,450 with sideways to positive bias. Only a close below Rs 47,100 would weaken the recovery.
Strategy:
Buy MCX Gold April Rs 47,670 with a target of Rs 48,300 and a stop loss at Rs 47,400.
MCX Silver March futures also moved in a sideways range after retracing 50 per cent of the recent fall near Rs 70,380. Meanwhile, price has moved above the bullish crossover of 5 (69,190) and 21 day EMA (68,080), which could be the key support for the day and any dip towards the same might attract buying. On the upside, key resistance exists around Rs 71,300, followed by Rs 72,670. On the momentum front, RSI has moved above the midline (55) suggesting sideways trend. However, it needs to sustain above to rebuild the strength. For the day, price is expected to move in the range of Rs 68,000-72,670 with a sideways to positive bias. Only a close below Rs 66,300 would reverse the trend to neutral.
Strategy:
Buy MCX Silver March at Rs 69,200 with a target of Rs 71,300 and a stop loss at Rs 67,900.
(Ravindra Rao is VP-Head Commodity Research at Kotak Securities)
