Commodity prices traded mixed on Tuesday, continuing the trend from the previous session. On Monday, bullion prices kept to a firm range bound trading for the day. Base metals prices witnessed some selling from day’s high as China prepared to cool down metals rally. Crude oil prices ended in the green on pipeline supply disruptions in the US after cyber-attack. Here is a look at how different commodities are behaving in today’s market.
Outlook: Bullion
Bullion prices traded firm with spot gold prices at COMEX were trading near $1836 per ounce while spot silver prices at COMEX were trading marginally up at $27.34 per ounce in the morning trade. The precious metals held gains with gold trading near three month high as inflation hedge and slower economic recovery. Traders and investors are betting on bond market movement over inflation concerns adding bullion to their portfolio. We expect bullion prices to trade higher for the day.
Trading Strategy:
Gold June resistance for the day lies at Rs. 48200 per 10 grams with support at Rs. 47700 per 10 grams.
MCX Silver May support lies at Rs. 70200 per KG, resistance at Rs. 72800 per KG.
Outlook: Crude Oil
Crude oil prices traded weak with benchmark NYMEX WTI crude oil prices were trading 0.80 per cent down to $64.40 per barrel in the morning trade. Crude oil prices traded under pressure on Tuesday as traders and investors weighed on demand concerns after Colonial Pipeline Co unveiled a timeline to restore supply. The higher inflation fears and weakness in equity indices also capped oil prices for the day. We expect crude oil prices to trade sideways to down for the day.
Trading Strategy:
MCX Crude Oil May support lies at Rs. 4690 per barrel with resistance at Rs. 4810 per barrel.
Outlook: Base Metals
Base metals prices traded steady with most of the metals kept to positive trading on Tuesday. Base metals are capped upside after China mulled to increase margins to curb over heating metals prices. Base metals are on bull run on strong demand outlook and lower supply concerns. The weaker dollar and China-Australia trade tensions have added fuel to the base metals rally. Base metals are expected to trade sideways to up for the day.
Trading Strategy:
MCX Copper May support lies at Rs. 783 and resistance at Rs. 805.
MCX Zinc May support lies at Rs. 234, resistance at Rs. 242.
MCX Nickel May support lies at Rs. 1290 with resistance at Rs. 1350.
(Tapan Patel is Senior Analyst (Commodities) at HDFC Securities)
By Ravindra Rao
MCX Gold June futures continued to move higher, but failed to move beyond the key resistance of Rs 48400. The trend for the day seems to be on the higher side as bullish crossover of 5 and 20 day EMA is still intact. On the resistance front, Rs. 48400 holds the key level for the day. Similarly on the downside Rs. 47550 (20 Day EMA) and Rs. 47200 holds key supports. RSI is hovering near 63 suggesting bullishness. Hence, any dip towards the supports would attract buying and push price towards the objective of Rs. 48400. Only a move above Rs. 48400 would intensify the rally.
Strategy:
Buy MCX Gold June at Rs. 47700 with a target of Rs. 48400 and a stop loss at Rs. 47400.
MCX Silver May futures have erased most of its gains and closed near the low of the day. Earlier prices hit the key resistance near Rs. 72600-72800, but failed to breach the trend line resistance. However, price is still trading above the 5 and 20 DMA which is a bullish indication. Support for the day is at Rs. 70900 followed by Rs. 70400. Similarly, resistance is seen near Rs. 72800 and Rs. 73800. Momentum oscillator RSI is trading near 63 suggesting bullish bias. To conclude, we expect silver to trade sideways to positive bias until Rs. 70400 holds.
Strategy:
Buy MCX Silver May at Rs. 70900 with a target price of Rs. 72550 and a stop loss at Rs. 70200
(Ravindra Rao, CMT, EPAT is VP-Head Commodity Research at Kotak Securities)
