Commodity prices traded mixed on Wednesday as bullion prices traded steady and base metals traded off the recent highs while crude oil prices witnessed some selling pressure on inventory build-up. The dollar index ended marginal up by 0.18 per cent for the day. Here is a look at how different commodities are behaving in today’s market.
Outlook: Bullion
Bullion prices traded steady with spot gold price at COMEX was trading near $1,808 per ounce while spot silver price at COMEX was trading flat at $27.61 per ounce in the morning trade. Bullion prices traded under pressure with rise in US bond yields despite of dovish stance from US Fed chairman Jerome Powell, as he signalled accommodative policy for next couple of years to support economic recovery. We expect bullion prices to trade sideways to up for the day.
Trading Strategy:
MCX Gold April resistance for the day lies at Rs. 47,200 per 10 grams with support at Rs. 46,500 per 10 grams.
MCX Silver March support lies at Rs. 68,500 per KG, resistance at Rs. 71,000 per KG.
Outlook: Crude Oil
Crude oil traded lower with benchmark NYMEX WTI crude oil prices were trading down by 1 per cent at $61 per barrel on Wednesday. Crude oil prices declined on inventory build as cold freeze has curbed demand from refiners in last few weeks. The US API data showed 1 mb of rise in crude oil stockpiles against forecast of 5.2 mb draw. Crude oil prices are expected to trade sideways to down for the day.
Trading Strategy:
MCX Crude Oil March support lies at Rs. 4,370 per barrel with resistance at Rs. 4,490 per barrel.
Outlook: Base Metals
Base metals complex traded weak on Wednesday with most of the metals witnessed selling from recent highs in the morning trade. Base metals prices declined on worries over US economic recovery with dovish stance from Fed chairman. Copper prices traded off the 2011 highs as stronger dollar and rise in bond yields capped the upside in commodities. We expect base metals to trade sideways to down for the day.
Trading Strategy:
MCX Copper March support lies at Rs. 701 and resistance at Rs.709.
MCX Zinc March support lies at Rs. 222, resistance at Rs. 227.
MCX Nickel February support lies at Rs. 1,380 with resistance at Rs. 1,420.
(Tapan Patel is a Senior Analyst (Commodities) at HDFC Securities)
By Ravindra Rao
MCX Gold April future moved in a range after its sharp rebound from the lower band of the downward sloping channel. Meanwhile, price is still hovering in the downward sloping channel with immediate resistance near Rs 47,280, followed by Rs 47,500 (21 Day EMA). On the other hand, key support holds around Rs 46,500, followed by Rs 46,200. On the momentum front, RSI has reversed from the oversold zone and now it is moving towards the mid zone of 50(40) indicating a sign of rebound in price . Moreover, price has closed above the immediate resistance of 5 day EMA (46,680) which has supported the recovery in price trend. Going by the above analysis, price is expected to move in the band of Rs 46,500-47,280 with sideways to positive bias.
Strategy:
Buy MCX Gold April at Rs 46,700 with a target of Rs 47,280 and a stop loss at Rs 46,400.
MCX Silver March future also remained in a sideways trend as it failed to move beyond the immediate resistance zone of Rs 70,780-70,880. Meanwhile, price is trading above the bullish crossover of 5 and 21 day EMA which has held together the recovery in prices. On the upside, Rs 70,880 holds key resistance. Price needs to sustain above the said resistance to extend its rally towards the next resistance of Rs 71,800, followed by Rs 72,700 levels. On the downside Rs 68,800 (21 DEMA) and Rs 67,600 (50 DEMA) holds key supports for Silver futures. Meanwhile, RSI is hovering near 52 suggesting a sideways move in price. For the day, price is expected to move in the range of Rs 70,880-68,800 with sideways to positive bias. However, only close below Rs 67,600 would change the trend to neutral.
Strategy:
Buy MCX Silver March at Rs 69,100 with a target of Rs 70,800 and a stop loss at Rs 67,600.
(Ravindra Rao is VP-Head Commodity Research at Kotak Securities)
