Commodity prices traded weak on Friday after a mixed previous session. In Thursday’s session Base metals managed to end in green after witnessing selling in evening session while Crude oil prices continued upside on lower supply concerns. Here is a look at how different commodities are behaving in today’s market.
Outlook: Bullion
Bullion prices traded weak with spot gold price at COMEX was trading below $17,700 per ounce while spot silver price at COMEX was trading down at $27.25 per ounce in the morning trade. Bullion prices witnessed selling with rise in US bond yields as US 10 year Treasury yields rose above 1.50 per cent to the highest levels since February 2020. The rally in the Bitcoin also pressured precious metals to trade lower. We expect bullion prices to trade sideways to down for the day.
Trading Strategy:
MCX Gold April resistance for the day lies at Rs. 45,800 per 10 grams with support at Rs. 46,500 per 10 grams.
MCX Silver March support lies at Rs. 67,500 per KG, resistance at Rs. 70,500 per KG.
Outlook: Crude Oil
Crude oil traded down with benchmark NYMEX WTI crude oil prices were trading over half a percent down near $63.20 per barrel on Friday. Crude oil prices traded under pressure with selling across equities and commodities with rise in bond yields. Crude oil prices are capped upside near the resistance level of $64/65 amid speculation over output boost from OPEC plus nations in the upcoming meeting. Crude oil prices are expected to trade sideways to down for the day.
Trading Strategy:
MCX Crude Oil March support lies at Rs. 4,520 per barrel with resistance at Rs. 4,670 per barrel.
Outlook: Base Metals
Base metals complex traded mixed as industrial metals witnessed selling pressure from global peers despite strong fundamentals. Copper prices traded off the 10 year highs with selling in equity indices and commodities. Aluminium prices pared some gains after rallying by 6 per cent at SHFE. Copper and Nickel prices are expected to trade sideways to up for the day while rest of the metals may witness mixed trading for the day.
Trading Strategy:
MCX Copper March support lies at Rs. 716 and resistance at Rs.725.
MCX Zinc March support lies at Rs. 223, resistance at Rs. 230.
MCX Nickel February support lies at Rs. 1,360 with resistance at Rs. 1,410.
(Tapan Patel is Senior Analyst (Commodities) at HDFC Securities)
By Ravindra Rao
MCX Gold April future continued to consolidate between Rs 46,050-46,700 as it failed to move above the key resistance level of Rs 47,000. Meanwhile, price is still hovering in the downward sloping channel with immediate resistance near Rs 47,000, followed by Rs 47,280 (21 Day EMA). On the other hand, key support holds around Rs 45,850 (recent bottom), followed by Rs 45,650. On the momentum front, RSI is hovering below 50 suggesting weak bias. Going by the above analysis, price is expected to move in the band of Rs 45,850-46,700 with a sideways bias. Only a close below Rs 45,850, would extend the downside further towards the Rs 45,650-45,550 zone.
Strategy:
Buy MCX Gold April at Rs 45,900 with a target of Rs 46,650 and a stop loss at Rs 45,650.
MCX Silver March future also remained in a sideways trend as it failed to move beyond the key 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 Silver prices. On the upside Rs 70,880 holds key resistance, price needs sustain above to extend its rally towards the next resistance of Rs 71,800, followed by Rs 72,700 levels. On the downside Rs 68,900 (21 DEMA) and Rs 67,750 (50 DEMA) hold key supports. Meanwhile RSI is hovering near 51 suggesting a sideways trend. However, it needs to sustain above 50 to strengthen the momentum in the price rally. Hence for the day price is expected to move in the range of Rs 70,880-67,800 with sideways bias. Only close below Rs 67,600 would change the trend to neutral.
Strategy:
Buy MCX Silver March at Rs 68,500 with a target of Rs 70,600 and a stop loss at Rs 67,500.
(Ravindra Rao is VP-Head Commodity Research at Kotak Securities)
