Commodity prices traded higher on Tuesday, continuing the trend from the previous session. On Monday, bullion prices kept to narrow trading range while base metals continued to soar on demand growth optimism. Crude
ended in green recovering from early decline. The dollar index and US bond yields were steady ahead of US FOMC meet. 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 $1779 per ounce while spot silver price at COMEX was trading flat near $26.12 per ounce in the morning trade. Bullion prices fluctuated between a narrow range, trading marginally down on a firm dollar index. We expect bullion prices to trade sideways to down for the day.
Trading Strategy:
MCX Gold June resistance for the day lies at Rs. 47800 per 10 grams with support at Rs. 47200 per 10 grams.
MCX Silver May support lies at Rs. 67500 per KG, resistance at Rs. 69800 per KG.
Outlook: Crude Oil
Crude oil prices traded higher with benchmark NYMEX WTI crude oil prices were trading over half a percent up to $62.27 per barrel in the morning trade. Crude oil prices traded up on short recovery, however the upside was capped on growing demand worries from India over rising virus cases. The partial lockdown measures in India and stare of emergency in Japan has raised concerns over fuel demand recovery from top oil consumers. We expect crude oil prices to trade sideways to up for the day.
Trading Strategy:
MCX Crude Oil May support lies at Rs. 4580 per barrel with resistance at Rs. 4720 per barrel.
Outlook: Base Metals
Base metals complex traded higher as most of the metals kept to positive trading range on Tuesday. Base metals prices gained on demand recovery hopes and lower supply concerns. Copper prices rose to the highest levels since 2011 on falling inventories at LME and possible of labour strike in Chile. The positive sentiments from Europe and US with stronger demand may support base metals to trade up. Base metals are expected to trade sideways to up for the day.
Trading Strategy:
MCX Copper May support lies at Rs. 755 and resistance at Rs. 765.
MCX May support lies at Rs. 231, resistance at Rs. 238.
MCX Nickel May support lies at Rs. 1210 with resistance at Rs. 1290.
(Tapan Patel is Senior Analyst (Commodities) at HDFC Securities)
By Ravindra Rao
MCX Gold traded sideways to down on Monday, testing a low of Rs 47253. The crossover of 8 DMA below the 20DMA has given a slight edge to the bears. Having said that, resistance is pegged near Rs 47670 which could act as the supply zone. Strong resistance near Rs 47800 above which the bear strength might fade. RSI is trading close to 50 indicating sideways move. Immediate support near yesterday’s low of Rs 47253 and then at Rs 47100. Going by the above evidence, today we expect the price to fall close to the 2nd support near Rs 47100, provided the resistance of Rs 47800 is held by the bears. On the flipside, sustained break above Rs 47800 might reverse the intraday trend.
Strategy:
Sell MCX Gold June at Rs 47650 with a target of Rs 47250/47100 and a stop loss at Rs 47800.
MCX Silver also fell yesterday and registered a low of Rs 68055. However, a late recovery helped silver to end on a flat note. The bears still have a slight edge as 8 DMA (68670) is still below the 20DMA (69010). Having said that, immediate resistance is near Rs 69010 and strong resistance is pegged at Rs 69500. Similarly, support is near Rs 68340 followed by Rs 68050. RSI is trading close to 50, indicating a sideways move. To conclude, we expect silver to trade sideways to lower until Rs 69500 holds. However if the bulls succeed in keeping it above Rs 69500 the trend might reverse.
Strategy:
Sell MCX Silver May at Rs 69000 with a target of Rs 68340/68050 and a stop loss at Rs 69400.
(Ravindra Rao, CMT, EPAT, is VP-Head Commodity Research at Kotak Securities)
