Commodities prices traded on an upbeat note on Monday continuing the positive trade from the previous session. Bullion prices pared some of weekly loses ended higher on Friday while base metals continued to soar on strong demand outlook. Here is a look at how different commodities are behaving in today’s market.
Outlook: Bullion
Bullion prices traded higher with spot gold price at COMEX was trading near $1,786 per ounce while spot silver price at COMEX was trading over half a percent up at $27.46 per ounce in the morning trade. Bullion prices traded firm on weaker dollar and pandemic worries. Gold prices managed to hold support at $1,760 per ounce while rally in base metals supported silver prices to trade higher on Monday. We expect bullion prices to trade sideways to up for the day.
Trading Strategy:
MCX Gold April resistance for the day lies at Rs. 46,600 per 10 grams with support at Rs. 45,900 per 10 grams.
MCX Silver March support lies at Rs. 67,500 per KG, resistance at Rs. 71,000 per KG.
Outlook: Crude Oil
Crude oil traded higher with benchmark NYMEX WTI crude oil prices were trading more than 1% up near $60 per barrel in the morning trade. Crude oil prices witnessed recovery as some of the lost oil production has returned on line in Texas. The resume of refinery operations will bring oil demand back on track. Crude oil prices are expected to trade sideways to up for the day.
Trading Strategy:
MCX Crude Oil March support lies at Rs. 4,290 per barrel with resistance at Rs. 4,420 per barrel.
Outlook: Base Metals
Base metals complex witnessed strong buying with most of the metals opened higher with higher demand outlook and supply deficit fears. Copper prices traded to the highest levels since 2011 crossing above $9,000 per tonne at LME while Nickel prices rallied above $20,000 to the most since 2014. The premium for cash copper over three-month metal is rising showing tight supply in spot market. We expect base metals to trade higher for the day.
Trading Strategy:
MCX Copper March support lies at Rs. 702 and resistance at Rs.712.
MCX Zinc March support lies at Rs. 230, resistance at Rs. 236.
MCX Nickel February support lies at Rs. 1,410 with resistance at Rs. 1,480.
(Tapan Patel is a Senior Analyst (Commodities) at HDFC Securities)
By Ravindra Rao
MCX Gold April future witnessed good recovery as price held the support of the lower bound of the downward sloping channel near the Rs 45,860-46,000 zone. Price is still hovering in the downward sloping channel with key resistance near Rs 46,600 (previous bottom), followed by Rs 46,800. On the other hand, key support holds around Rs 45,850, followed by Rs 45,650. Meanwhile, price is trading below the negative crossover of 5 and 21 day EMA which could limit the upside in price trend. On the momentum front, RSI is hovering around 30, suggesting a weaker trend but is also in the oversold zone that could limit further downside in price. Going by the above analysis price is expected to move in the band of Rs 45,850-46,600 with sideways bias.
Strategy:
Buy MCX Gold April at Rs 46,100 with a target of Rs 46,600 and a stop loss at Rs 45,800.
MCX Silver March future witnessed a sharp rebound as price held the support of the rising trend line and 50 day EMA near Rs 67,400. Meanwhile, price is trading above the bullish crossover of 5 and 21 day EMA which has strengthened the recovery in prices. Meanwhile, Rs 70,760 holds key resistance for March futures because it has failed to move beyond on a couple of occasions. Above Rs 70,760, next key resistance exists around Rs 72,400. Meanwhile RSI is hovering near 53 suggesting a sideways trend. For the day price is expected to move in the range of Rs 67,400-70,700 with sideways to positive bias.
Strategy:
Buy MCX Silver March at Rs 69,050 with a target of Rs 70,700 and a stop loss at Rs 67,800.
(Ravindra Rao is VP-Head Commodity Research at Kotak Securities)
