Commodity prices traded mixed on Monday with bullion and energy complex traded lower while base metals gained on demand hopes. The dollar index ended flat at 90.34 mark for the day. Here is a look at how different commodities are behaving in today’s market.
Outlook: Bullion
Bullion prices traded steady on Tuesday with spot gold prices at COMEX was trading marginally up to $1,878 per ounce while spot silver prices at COMEX was trading near $26.29 per ounce in the morning trade. Bullion prices gained on dollar decline as US house supported US President Trump’s proposal for $2,000 checks. The traders and investors are awaiting for senate vote to increase stimulus checks amount. We expect bullion prices to trade sideways to up for the day over mixed global cues and weaker dollar.
Trading Strategy:
MCX Gold February resistance for the day lies at Rs. 50,400 per 10 grams with support at Rs. 49,800 per 10 grams.
MCX Silver March support lies at Rs. 67,500 per KG, resistance at Rs. 69,500 per KG.
Outlook: Crude Oil
Crude oil prices traded higher on Tuesday with benchmark NYMEX WTI crude oil prices was trading half a percent up to $47.84 per barrel in the morning trade. Crude oil prices gained on demand recovery hopes over US stimulus and proposal of increasing stimulus checks amount. The rally in equity indices and weaker dollar also supported oil prices to trade firm. Crude oil prices are expected to trade sideways to up for the day on positive global cues.
Trading Strategy:
MCX Crude Oil January support lies at Rs. 3,470 per barrel with resistance at Rs. 3,580 per barrel.
Outlook: Base Metals
Base metals prices traded under pressure on Tuesday with most of the metals traded lower despite a weaker dollar and positive equity indices. Base metals demand has been affected due to recent lockdowns on pandemic fears over new strain of coronavirus. Base metals are expected to trade sideways to up for the day witnessing recovery later in the evening session.
Trading Strategy:
MCX Copper January support lies at Rs. 603 and resistance at Rs. 610.
MCX Zinc January support lies at Rs. 217, resistance at Rs. 223.
MCX Nickel January support lies at Rs. 1,255 with resistance at Rs. 1,290.
(Tapan Patel is a Senior Analyst (Commodities) at HDFC Securities)
By Ravindra Rao
MCX Gold February has failed to move beyond the immediate resistance level of Rs 50,690 and slid towards the 5 day EMA support at Rs 50,060. Meanwhile strong support for Feb futures exists around Rs 49,800 (21 Day EMA), followed by Rs 49,600. The strength index is hovering around 54 suggesting sideways to higher bias. However it needs to sustain above 50 to strengthen the trend further. In the near term, price seems to consolidate in the band of Rs 49,800-50,690 with sideways bias. Only failure to hold above Rs 49,600 would negate the bullish momentum in price.
Strategy:
Buy MCX Gold Feb at Rs 49,800 with a target of Rs 50,450 and a stop loss at Rs 49,550.
MCX Silver March future continued to move inside the upward sloping channel with lower band support near Rs 66,600-66,400. Price also got support from 5 day EMA (67,800) along with breakout support zone near Rs 66,600. Moreover the bullish crossover of 5 and 21 day EMA along with strong RSI (67) has strengthened the bull case. Buying might remerge at lower levels for an objective of Rs 70,400.
Strategy:
Buy MCX Silver Mar at Rs 67,900 with a target of Rs 70,400 and a stop loss at Rs 66,600.
(Ravindra Rao is VP-Head Commodity Research at Kotak Securities)
