Gold futures eased on Tuesday as it failed to breach the key resistance of 200-day EMA at Rs 47,600. The move in the precious metal was driven by gains in the dollar index, despite weaker than expected US retail sales. At this point, the 200-day EMA (Rs 47,600) could act as a key resistance zone, which could limit the upside. So the price has to sustain above the 200-DEMA to extend its rebound towards Rs 47,800-48,000 zone. On the other hand, if it fails to breach the 200-DEMA then it will again decline towards Rs 46,950 (8-day EMA), followed by Rs 46,400. Meanwhile, the momentum indicator MACD is hovering below the mid line, suggesting weakness in the short-term trend. So going by the above evidence, it is expected that price will move in the range of Rs 46,950-47,600 with a sideways bias. Only a close below Rs 46,950 would derail the recovery.
Trading Range: Rs 46,950-47,600
MCX Silver slipped on Tuesday after inching towards its 8-day EMA resistance near Rs 63,900. In case the price settles above Rs 63,900, it might move towards the next resistance at Rs 65,200 (20-day EMA). On the flip side, if it fails to move above Rs 63,900 then it might derail the recovery in price trend and test the key supports at Rs 62,400, followed by Rs 61,500. Meanwhile, the reversal in RSI (34) from the oversold zone has supported the rebound in the price. However, it is still below 50, which might impact the bulls. So for the day, the price is expected to move in the range of Rs 62,400-63,900 with a sideways bias ahead of the US FOMC meeting minutes. Either side close of the range would bring more clarity in the price trend.
Trading Range: Rs 62,400-63,900
(Ravindra Rao is CMT , EPAT, VP – Head of Commodity Research, Kotak Securities Ltd. Views are his own)
Tapan Patel
Here is a look at how different commodities are behaving in today’s market:
Outlook: Bullion
Bullion prices traded firm on Wednesday with spot gold prices at COMEX trading near $1,789 per ounce while spot silver prices at COMEX trading over half a percent up at $23.73 per ounce in morning trade. The precious metals fluctuated in upper trading range on mixed global cues amid rising worries over fast spreading Delta variant and a weak data. Traders and investors are awaiting for US Fed minutes to gauge any signs of tapering of assets purchase. We expect bullion prices to trade sideways to up for the day on mixed global cues.
Trading Strategy: MCX Gold October resistance for the day lies at Rs 47,500 per 10 gram with support at Rs 46,900 per 10 gram. MCX Silver September support lies at Rs 62,500 per kg, resistance at Rs 65,000 per kg.
Outlook: Crude Oil
Crude oil prices traded marginally up on Wednesday with benchmark NYMEX WTI crude oil trading 0.24% up near $66.50 per barrel in morning trade. Crude oil prices pared some losses after falling for five consecutive days. Crude oil prices have witnessed selling pressure on gloomy demand outlook over rising virus cases in US and other parts of the world. Crude oil prices are trading firm on Wednesday with expectations of drawdown in weekly inventories after API report showed 1.16 MB of decline. We expect crude oil prices to trade sideways to down for the day.
Trading Strategy: MCX Crude Oil August support lies at Rs 4,910 per barrel with resistance at Rs 5,040 per barrel.
Outlook: Base Metals
Base metals prices traded firm with most of the metals witnessing recovery on Wednesday. Base metals earlier traded lower on weak demand outlook with disappointing Chinese data. A halt at a border crossing in Xinjiang because of virus cases is affecting shipments of copper, zinc and lead from neighboring Kazakhstan and Russia. Base metals may trade sideways to up for the day.
Trading Strategy: MCX Copper August support lies at Rs 710 and resistance at Rs 720. MCX Zinc August support lies at Rs 248, resistance at Rs 254. MCX Nickel August support lies at Rs 1,440 with resistance at Rs 1,490.
(Tapan Patel is Senior Analyst, Commodities, HDFC Securities. Views are his own)
