Commodity prices traded mixed on Thursday, after trading steadily in the previous session. On Wednesday, most of the commodities in the non-agro segment witnessed buying. Bullion prices recovered in the evening session despite a stronger dollar post the US employment data release. Base metals traded firm on higher demand outlook while crude oil prices continued upside move on bullish weekly inventory data. The dollar index extended gains by 0.42 per cent to the 92.44-mark for the day. Here is a look at how different commodities are behaving in today’s market.
Outlook: Bullion
Bullion prices traded firm on Thursday as spot gold price at COMEX was trading near $1774 per ounce while spot silver price at COMEX was trading marginally up at $26.16 per ounce in the morning trade. The precious metals rebounded in the last trading session post the US ADP employment data, which was lesser than the previous reading. We expect bullion prices to trade sideways to up for the day.
Trading Strategy:
MCX Gold August resistance for the day lies at Rs. 47100 per 10 grams with support at Rs. 46500 per 10 grams.
MCX Silver September support lies at Rs. 67800 per KG, resistance at Rs.71200 per KG.
Outlook: Crude Oil
Crude oil prices traded higher on Thursday as benchmark NYMEX WTI crude oil price was trading 0.31 per cent up at $73.70 per barrel in the morning trade. Crude oil prices extended their gains on drawdown in US weekly inventories after EIA data showed US stockpiles fell by 6.7 Mb in last week. Traders and investors are waiting for the outcome from OPEC plus meeting, on whether they would maintain or ease supply cuts in the second half of the year. We expect crude oil prices to trade sideways to up for the day.
Trading Strategy:
MCX Crude Oil July support lies at Rs. 5410 per barrel with resistance at Rs. 5540 per barrel.
Outlook: Base Metals
Base metals prices traded marginally down on Thursday as most of the metals kept to lower trading range on lesser than expected China manufacturing data. Base metals traded lower on a stronger dollar and pandemic worries. The China CAIXIN Manufacturing PMI data came at 51.3 against expectations of 51.8. The rising cases of Delta variant have led to lockdown restrictions in Europe and parts of Australia. Base metals may trade sideways to down on mixed global cues for the day.
Trading Strategy:
MCX Copper July support lies at Rs. 712 and resistance at Rs.725.
MCX Zinc July support lies at Rs. 234, resistance at Rs. 242.
MCX Nickel July support lies at Rs. 1320 with resistance at Rs. 1390.
(Tapan Patel is Senior Analyst (Commodities) at HDFC Securities)
By Ravindra Rao
During Wednesday’s session,
MCX Gold August futures witnessed a good rebound from the key support levels of Rs. 46260-46300 (61.8 per cent Fibonacci level). The said levels have become strong support as the price has bounced from the same zone on multiple occasions. However, a break of this support zone would extend the downside towards the next key support levels of Rs. 45400-45300.
On the other hand, if the price turns around and breaks above the initial resistance at Rs. 47050 (8-day EMA), then it would test the crucial resistance of Rs. 47350 (250-Day EMA). The vital resistance for gold exists at Rs. 47350; price has to close above this to reverse the bearish bias. The current reading on the RSI is 38, supporting the bears. So for the day, the price is expected to trade in the range of Rs. 46400-47050 with a sideways bias.
Strategy:
The trading range for MCX Gold August futures lies between Rs. 46400-47050.
MCX Silver September futures rebounded from their support on Wednesday, following the recovery in the yellow metal. The immediate trend seems to be sideways, ahead of US Job data this weekend. Support for the price holds around 61.8 per cent Fibonacci level at Rs. 67800, followed by Rs. 66900. Immediate resistance is seen around Rs. 69800 (8-Day EMA), which is the key level.
A move above Rs. 69800, would confirm the reversal and push the price towards Rs. 71550. Meanwhile, the momentum indicator RSI is supporting a sideways trend as it is hovering near 40. For the day, the price might continue to move in the range of Rs. 68000-69800 with a sideways bias. Only a close above Rs. 69800 would bring fresh buying interest and push it towards Rs. 71550.
Strategy:
The trading range for MCX Silver September futures lies between Rs. 68000-69800.
(Ravindra Rao, CMT, EPAT is VP-Head Commodity Research at Kotak Securities)
