Commodity prices traded on an upbeat note on Friday, after a mixed trading session in the previous session. On Thursday, bullion prices witnessing strong rally while base metals kept to firm trading range. Crude oil prices traded weak underpinned by weak demand concerns. The weaker dollar boosted buying in commodities along with positive US data. 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 $1764 per ounce while spot silver price at COMEX was trading near $25.83 per ounce in the morning trade. Bullion prices rallied supported by dollar decline and fall in US bond yields. The 10 year US treasury yields fell to 1.54 per cent for the day. Precious metals prices also got a boost after imposition of sanctions by US on Russia which added geopolitical risk premium to the prices. We expect bullion prices to trade higher for the day.
Trading Strategy:
MCX Gold June resistance for the day lies at Rs. 47600 per 10 grams with support at Rs. 46900 per 10 grams.
MCX Silver May support lies at Rs. 66800 per KG, resistance at Rs. 69500 per KG.
Outlook: Crude Oil
Crude oil prices traded firm with benchmark NYMEX WTI crude oil prices were trading near $63.58 per barrel in the morning trade. Crude oil prices regained strength on Friday over weaker dollar and demand revival on positive US economic data. The higher demand from China and US following positive economic data has kept oil prices at four week highs. We expect crude oil prices to trade sideways to up for the day.
Trading Strategy:
MCX Crude Oil April support lies at Rs. 4680 per barrel with resistance at Rs. 4780 per barrel.
Outlook: Base Metals
Base metals complex traded mixed with most of the metals traded firm on higher demand optimism. Copper prices extended gains rallying 1 per cent in the previous trade while rest of the metals on lower supply concerns on China pollution curbs. Base metals prices are supported by weaker dollar and better than expected data from US. Base metals are expected to trade sideways to up for the day.
Trading Strategy:
MCX Copper April support lies at Rs. 712 and resistance at Rs. 720.
MCX Zinc April support lies at Rs. 225, resistance at Rs. 231.
MCX Nickel April support lies at Rs. 1210 with resistance at Rs. 1270.
(Tapan Patel is Senior Analyst (Commodities) at HDFC Securities)
By Ravindra Rao
MCX Gold June futures have finally breached the higher end of the 5 day consolidation range Rs 46250-47033. Price has also breached the 38.2 per cent Fibonacci level of the previous downtrend at Rs 47080, suggesting reversal in price trend. The bullish crossover of 5 and 21 also strengthened the bull case. Now the next resistance holds around Rs 47480 (200 DAY EMA), which could be the target for the day. Immediate support holds around Rs 46760 (5 Day EMA). On the momentum front, MACD has moved above the mid line suggesting bullish momentum. Hence for the day, price is expected to move in the band of Rs 46760-47480 with a positive bias. A move above Rs 47480 would extend the upside towards the next key level of Rs 48000.
Strategy:
Buy MCX Gold June at Rs 46950 with a target of Rs 47450 and a stop loss at Rs 46700.
MCX Silver May futures followed the path of the gold and reached the 50 per cent Fibonacci extension at Rs 68580. The expansion of the Bollinger band suggests the bullishness in price trend. Now the next target of the bullish flag breakout is at Rs 69200 (61.8 per cent Fibonacci extension). On the downside, Rs 67550 (5 Day EMA) holds key support. On the momentum front, RSI is hovering above 60 suggesting sideways to higher trend. So for the day, any dip towards the support zones would attract buying and push the May futures towards Rs 69200. A close above Rs 69200 would further push price towards Rs 70800.
Strategy:
Buy MCX Silver May at Rs 67900 with a target of Rs 69200 and a stop loss at Rs 67100.
(Ravindra Rao, CMT is VP-Head Commodity Research at Kotak Securities)
