Outlook: Bullion
Bullion prices traded higher on Tuesday with spot gold prices at COMEX half a percent up near $1,774 per ounce while spot silver prices at COMEX rose by more than 1% near $23.45 per ounce. Bullion prices gained supported by weaker dollar and a fall in US bond yields. The fall in equity indices also boosted buying in precious metals for the day. The dollar index was trading 0.28% down while 10-year US treasury yields were trading near 1.58% for the day. Bullion prices may trade sideways to up for the day.
Trading Strategy:
Gold December resistance for the day lies at Rs 47,500 per 10 gram with support at Rs 47,100 per 10 gram. MCX Silver December support lies at Rs 61,800 per kg, resistance at Rs 65,000 per kg.
Outlook: Crude Oil
Crude oil prices traded firm on Tuesday with benchmark NYMEX WTI crude oil prices up 0.34% to $81.97 per barrel. Crude oil may limit upside with rise in US shale oil production. We expect crude oil prices to trade sideways to up for the day.
Trading Strategy: MCX Crude Oil October support lies at Rs 6,150 per barrel with resistance at Rs 6,310 per barrel.
Outlook: Base Metals
Base metals prices traded higher on Tuesday. Most of the metals extended gains on lower supply concerns. Base metals are surging as global energy crisis deepens the supply crunch and adds to inflation worries. In Europe, Glencore Plc and Nyrstar have both announced cuts to zinc output, while local governments in China are requiring aluminum smelters to curb their energy use. Copper prices rallied as spot contracts traded at the biggest premium over futures in at least 27 years in London. Base metals may trade sideways to up for the day.
Trading Strategy: MCX Copper October support lies at Rs 787 and resistance at Rs 815. MCX Zinc October support lies at Rs 302, resistance at Rs 318. MCX Aluminium September support lies at Rs 248 with resistance at Rs 258.
(Tapan Patel is Senior Analyst, Commodities, HDFC Securities. Views are his own)
