Commodity prices traded steady on Tuesday, continuing the trend from the previous session. On Monday, most of the commodities in the non-agro segment witnessed recovery from the recent lows. Bullion prices rebounded after the previous week’s sell-off while base metals kept to firm trading range on a weaker dollar. Crude oil prices leaped over 2 per cent on delayed Iran nuclear talks. The dollar index fell by 0.35 per cent to 91.90 for the day. Here is a look at how different commodities are behaving in today’s market.
Outlook: Bullion
Bullion prices traded firm on Tuesday with spot gold price on COMEX was trading higher near $1787 per ounce while spot silver price on COMEX was trading flat at $25.96 per ounce in the morning trade. Bullion prices edged higher, supported by the weaker dollar and a plunge in the US bond yields. The 10-year US Treasury yields fell to 1.43 per cent, boosting buying in gold. The traders are awaiting US Fed Chairman’s testimony after Fed signalled a rate hike in 2023. We expect bullion prices to trade sideways to up for the day.
Trading Strategy:
MCX Gold August futures’ resistance for the day lies at Rs. 47100 per 10 grams with support at Rs. 46600 per 10 grams.
MCX Silver July support lies at Rs. 66500 per KG, resistance at Rs. 69800 per KG.
Outlook: Crude Oil
Crude oil prices traded steady on Tuesday as benchmark NYMEX WTI crude oil prices were trading 0.07 per cent higher at $73.17 per barrel in the morning trade. Crude oil prices rallied above $73 per barrel supported by a weaker dollar and a possible delay on Iran nuclear talks. The negotiations to revive the Iran nuclear deal paused on Sunday after hard-line judge Ebrahim Raisi won Iran’s presidential election. Iranian President-elect Ebrahim Raisi on Monday backed talks between Iran and the six world powers to revive a 2015 nuclear deal but flatly rejected meeting US President Joe Biden, even if Washington removed all sanctions. We expect crude oil prices to trade sideways to up for the day.
Trading Strategy:
MCX Crude Oil July futures support lies at Rs. 5380 per barrel with resistance at Rs. 5490 per barrel.
Outlook: Base Metals
Base metals prices traded firm on Tuesday as most of the metals witnessed recovery from their recent lows. Base metals traded higher on dollar decline and a surge in equity indices, boosting demand outlook on global economic recovery. Nickel prices were trading with over a per cent gain in the morning trade. Copper prices halted their decline on bargain buying. Base metals are expected to trade sideways to up for the day.
Trading Strategy:
MCX Copper June support lies at Rs. 692 and resistance at Rs. 705.
MCX Zinc June support lies at Rs. 232, resistance at Rs. 240.
MCX Nickel June support lies at Rs. 1280 with resistance at Rs. 1340.
(Tapan Patel is Senior Analyst (Commodities) at HDFC Securities)
By Ravindra Rao
MCX Gold futures bounced back on Monday after last week’s sharp decline. The 250-day EMA (Rs. 47360) is the key resistance for August futures, which might act as immediate resistance. A break above the said resistance would provide a bullish tilt for gold prices, taking it towards Rs. 47750-47900 levels. On the downside, Rs. 46600 holds the key support, followed by Rs. 46220 (61.8 per cent Fibonacci retracement level of the uptrend). Meanwhile, the recovery in RSI from the oversold zone of 30 to 36.60 has strengthened the momentum, however, it has to sustain above the 50-mark to bring a renewed strength in the price trend. So for the day, the trading range seems to be between Rs. 46600-47360. If the price moves beyond Rs. 47360 then we could expect a further recovery in the price.
Strategy:
Buy MCX Gold August futures at Rs. 46850 with a target of Rs. 47350 and a stop loss at Rs. 46600.
MCX Silver July futures managed to settle above the key support of Rs. 66900 after hitting a new low on Monday. The key resistance for the price is at Rs. 68950 (5-day EMA). If it manages to rise above the 5-day EMA, then the upside might extend towards Rs. 69750. The nearby support for July futures exists around Rs. 66550-66900 levels. A decline below these levels would extend the downside towards its next support at Rs. 65500. Short-term momentum has turned negative as RSI is hovering near 34. So for the day, the price might continue to move in the range of Rs. 66550-68950 with a sideways bias. Only a close above Rs. 68950 would extend the price recovery towards Rs. 69750.
Strategy:
Buy Silver July futures at Rs. 67200 with a target of Rs. 68550 and a stop loss at Rs. 66500.
(Ravindra Rao, CMT, EPAT is VP-Head Commodity Research at Kotak Securities)
