Commodity prices traded firm on Tuesday as bullion and crude oil traded on an upbeat note after a mixed trading session on Monday. The dollar index ended flat for the day in absence of US markets. Here is a look at how different commodities are behaving in today’s market.
Outlook: Bullion
Bullion prices traded firm with spot gold price at COMEX was trading near $1,824 per ounce while spot silver price at COMEX was trading over half a percent up near $27.78 per ounce in the morning trade. Bullion prices traded higher supported by weaker dollar. The dollar index was down by 0.20 per cent in the morning trade boosting buying in precious metals. The traders and investors are awaiting for fresh triggers to get bullish momentum in precious metals. We expect bullion prices to trade sideways to up for the day.
Trading Strategy:
MCX Gold April resistance for the day lies at Rs. 47,600 per 10 grams with support at Rs. 47,000 per 10 grams.
MCX Silver March support lies at Rs. 68,500 per KG, resistance at Rs. 72,600 per KG.
Outlook: Crude Oil
Crude oil prices traded higher with benchmark NYMEX WTI crude oil price was over than 1 per cent gain to $60.22 per barrel in the morning trade. Crude oil prices gained on lower supply expectations as production was halted in Texas, the main producing region of US due to cold weather. The tensions in Middle East also supported prices to trade firm on Saudi – Iran tensions. Crude oil prices are expected to trade sideways to up for the day.
Trading Strategy:
MCX Crude Oil February support lies at Rs. 4,320 per barrel with resistance at Rs. 4,420 per barrel.
Outlook: Base Metals
Base metals complex traded higher as most of the metals kept to firm trading except aluminium. Copper rose to the highest levels since 2012 on stronger demand and backwardation scenario. The rally in equity indices and vaccine rollouts has boosted investment sentiments in base metals. Base metals are expected to trade sideways to up for the day.
Trading Strategy:
MCX Copper February support lies at Rs. 642 and resistance at Rs. 648.
MCX Zinc February support lies at Rs. 223, resistance at Rs. 228.
MCX Nickel February support lies at Rs. 1,320 with resistance at Rs. 1,370.
(Tapan Patel is a Senior Analyst (Commodities) at HDFC Securities)
By Ravindra Rao
MCX Gold April future is consolidating in the band of Rs 46,960 (78.6 per cent Fibonacci level) and (5 DEMA) Rs 47,480 as price held the key support near Rs 46,960. Meanwhile, price is still moving inside the downward sloping channel with resistance near Rs 48,000. So price needs to sustain above the channel resistance to turn bullish. On the momentum front, RSI is hovering around 38, suggesting a sideways bias. Going by the above analysis price is expected to move in the band of Rs 46,960-47,480 with sideways bias. A move above Rs 47,480 would push prices towards the higher band of the channel near Rs 47,900. On the other hand, close below Rs 46,960 would weaken the recovery.
Strategy:
Buy MCX Gold April at Rs 47,100 with a target of Rs 47,480 and a stop loss at Rs 46,900.
MCX Silver March future witnessed good rebound as it held the key support of 21 day EMA at Rs 68,400. Meanwhile, price is hovering above the bullish crossover of 5 and 21 day EMA which has supported the recovery in price. On the broader terms price is still moving inside the rising channel with RSI at 57 suggesting sideways to bullish bias. However, it needs to sustain above to rebuild the strength. Below Rs 68,400, next key support exists around Rs 66,950 (50 DEMA and lower band of the upward channel coincides near the same zone). Moreover on the upside, key resistance exists around Rs 70,760, followed by Rs 71,600. For the day, price is expected to move in the range of Rs 68,400-71,600 with sideways to higher trend. Only a close below Rs 68,200 would extend the fall towards the next key support at Rs 66,950.
Strategy:
Buy MCX Silver March at Rs 69,450 with a target of Rs 71,450 and a stop loss at Rs 68,200.
(Ravindra Rao is VP-Head Commodity Research at Kotak Securities)
