Commodity prices traded firm on Wednesday with most of the commodities in the non-agro segment ending higher except gold. Gold prices traded under pressure with a rally in US bond yields, while silver prices traded higher following strong base metals. Base metals prices traded positive with strong global cues, while crude oil prices rallied despite a rise in weekly inventories. Here is a look at how different commodities are behaving in today’s market.
Outlook: Bullion
Bullion prices traded weak on Thursday with spot gold prices at COMEX trading near $1,797 per ounce, while spot silver prices at COMEX were trading down at $25.15 per ounce in the morning trade. The precious metals traded lower with gold prices closing at the lowest levels in two weeks. The 10 year US Treasury yields rose to 1.28% while the dollar index rose to 92.78 mark. We expect bullion prices to trade sideways to down for the day.
Trading Strategy
Gold August resistance for the day lies at Rs 47,800 per 10 grams with support at Rs 47,200 per 10 grams. MCX Silver September support lies at Rs 66,200 per KG; resistance is seen at Rs 67,800 per KG.
Outlook: Crude Oil
Crude oil prices traded weak on Thursday with benchmark NYMEX WTI crude oil prices trading 0.54 per cent down near $69.92 per barrel in the morning trade. Crude oil prices pared some of previous gains on demand worries and rise in weekly inventories. Earlier, crude oil prices rallied on bargain buying from support levels of $66 per barrel. The EIA report showed that weekly US crude oil stockpiles rose by 2.10 mb. We expect crude oil prices to trade sideways to down for the day.
Trading Strategy
MCX Crude Oil August support lies at Rs 5,160 per barrel with resistance at Rs 5,280 per barrel.
Outlook: Base Metals
Base metals prices traded mixed on Thursday with most of the metals trading firmly in the morning trade. Nickel prices may trade with a bullish bias on higher demand as Tesla has struck a nickel-supply deal with BHP Group as the electric-car maker seeks to protect itself from a future supply crunch. Aluminium prices traded under pressure on higher supply while copper and Zinc prices kept range bound movement ahead of China’s state reserve inventory sell. Base metals may trade sideways to up for the day.
Trading Strategy
MCX Copper July support lies at Rs 720 and resistance at Rs 732. MCX Zinc July support lies at Rs 239, resistance at Rs 247. MCX Nickel July support lies at Rs 1,370 with resistance at Rs 1,430.
(Tapan Patel is Senior Analyst (Commodities) at HDFC Securities)
By Ravindra Rao
MCX Gold August futures dropped on Wednesday, but continued with a consolidative tone. Price has dipped towards the midline of the Bollinger band support at Rs 47,550 after testing the higher resistance band in previous week. The key support for Gold August futures holds around Rs 47,426 (50% Fibonacci retracement level), followed by Rs 47,160. On the upside, Rs 47,880 (8-day
) is the first hurdle for the day. Price has to move above Rs 47,880 to bring fresh buying interest. Meanwhile the momentum indicator RSI is showing a sideways trend as it stood close to 50 (47) suggesting a sideways bias. Despite the recent fall in prices, gold is expected to trade on a positive note till it holds the key support of Rs 47,160. So for the day, price is expected to trade in the range of Rs 47,160-47,880 with sideways bias.
Trading Range: Rs 47,160-47,880
MCX Silver futures witnessed a good rebound from the rising trend line support near Rs 66,280. Price also held the support of lower Bollinger band (-2 SD) at Rs 66,750, suggesting a phase of recovery in price. The rebound in the strength index from the oversold zone (30) towards 40 (38) has supported the bounceback. Meanwhile, resistance for silver is seen near Rs 68,000 (8-day EMA), followed by Rs 68,800 (Midline of Bollinger band). For the day, price is expected to move in the range of Rs 66,280-68,000 with a sideways bias. Only a close above Rs 68,000 would turn the trend higher. On the other hand, if it closes below Rs 66,280, then the overall trend would turn negative.
Trading Range: Rs 66,280-68,000
(Ravindra Rao, CMT, EPAT is VP-Head Commodity Research at Kotak Securities)
