Commodity prices traded mixed on Wednesday, continuing the trend from the previous session. On Tuesday, bullion prices ended lower on a stronger dollar while crude oil and base metals rebounded from day’s losses to end in green. The dollar index ended 0.14 per cent up for the day. Here is a look at how different commodities are behaving in today’s market.
Outlook: Bullion
Bullion prices traded steady on Wednesday as spot gold price at COMEX was trading near $1895 per ounce while spot silver price at COMEX was trading marginally up at $27.64 per ounce in the morning trade. Precious metals are trading in a narrow range as traders and investors are waiting for fresh triggers from US inflation data. The lack of key economic data and comments from the US treasury secretary on inflation has kept the bullion prices in range during the week so far. We expect bullion prices to trade sideways to down for the day.
Trading Strategy
:
MCX Gold August resistance for the day lies at Rs. 49500 per 10 grams with support at Rs. 48800 per 10 grams.
MCX Silver July support lies at Rs. 70200 per KG, resistance at Rs. 72400 per KG.
Outlook: Crude Oil
Crude oil prices traded higher on Wednesday as benchmark NYMEX WTI crude oil price was trading over half a percent up at $70.39 per barrel in the morning trade. Crude oil prices rose above $70 to their highest since October 2018, on a strong demand outlook. The API report showed that weekly US crude oil stockpiles fell by 2.1 Mb in last week. Ease in lockdown measures along with large-scale vaccination programs has boosted the demand outlook for oil. We expect crude oil prices to trade higher for the day.
Trading Strategy:
MCX Crude Oil June support lies at Rs. 5060 per barrel with resistance at Rs. 5170 per barrel.
Outlook: Base Metals
Base metals prices traded mixed on Wednesday as most of the metals kept to a narrow trading range. Base metals traded under pressure on weak demand outlook from China, mixed inflation data, and lower imports. China’s refined copper output fell to 850.1kt in May, down 3.1 per cent from April, amid maintenance. Aluminum output at 3.315m tons, was down 1.3 per cent on daily basis from April, amid disruptions in Yunnan, Inner Mongolia due to power rationing, emission controls. Base metals are expected to trade sideways to up for the day.
Trading Strategy:
MCX Copper June support lies at Rs. 735 and resistance at Rs. 748.
MCX Zinc June support lies at Rs. 234, resistance at Rs. 242.
MCX Nickel June support lies at Rs. 1290 with resistance at Rs. 1350.
(Tapan Patel is Senior Analyst (Commodities) at HDFC Securities)
