Commodity prices traded mixed on Friday, after trading volatile in the previous session. On Thursday, bullion prices struggled to hold weekly gains following positive US economic data. Base metals traded higher on higher demand outlook and China pollution curbs. Crude oil prices traded higher on expectations that demand will offset Iranian supply. The dollar index ended marginally down near the 90 mark for the day. Here is a look at how different commodities are behaving in today’s market.
Outlook: Bullion
Bullion prices traded weak on Friday with spot gold price at COMEX was trading near $1893 per ounce while spot silver price at COMEX was trading 0.36 per cent lower at $27.73 per ounce in the morning trade. The precious metals witnessed a decline after positive US economic data showed strong economic growth. Traders and investors are awaiting key data on US inflation in the evening session which has kept bullion prices in a range. We expect bullion prices to trade sideways to down for the day.
Trading Strategy:
MCX Gold June resistance for the day lies at Rs. 48900 per 10 grams with support at Rs. 48200 per 10 grams.
MCX Silver July support lies at Rs. 70200 per KG, resistance at Rs. 72800 per KG.
Outlook: Crude Oil
Crude oil prices traded firm with benchmark NYMEX WTI crude oil price was trading around half a percent up near $67.17 per barrel in the morning trade. Crude oil prices traded higher on expectations of US fuel demand recovery. The higher demand in the summer driving season has supported oil prices to trade up. The weekly inventory draw and positive US economic data have offset higher supply concerns from Iran. We expect crude oil prices to trade sideways to up for the day.
Trading Strategy:
MCX Crude Oil June support lies at Rs. 4810 per barrel with resistance at Rs. 4950 per barrel.
Outlook: Base Metals
Base metals prices traded firm on Friday as most of the metals kept to the positive trading range after witnessing recovery in the previous session. Base metals rallied on positive US GDP numbers which have raised the demand outlook for industrial metals. Base metals got a boost from China’s curb on pollution after the authorities targeted the steel industry while other metals followed the cues. The stricter environmental controls have already tightened the outlook for aluminum supply from China, while major copper smelters have pledged to cut emissions. Base metals are expected to trade sideways to up for the day.
Trading Strategy:
MCX Copper June support lies at Rs. 760 and resistance at Rs. 772.
MCX Zinc June support lies at Rs. 234, resistance at Rs. 242.
MCX Nickel June support lies at Rs. 1290 with resistance at Rs. 1350.
(Tapan Patel is Senior Analyst (Commodities) at HDFC Securities)
By Ravindra Rao
MCX Gold June futures moved in a sideways range in yesterday’s trade. Price is hovering around the 8-day EMA (48500) and above the initial support of Rs. 48330. Below Rs. 48330, key support for the day is at Rs. 48150, followed by Rs. 47910 (20 Day EMA). On the upside, Rs. 49250 holds the major resistance (Higher Bollinger Band), followed by Rs. 49550. Meanwhile, the price is hovering near the long-term trend line resistance, a decisive break of which would strengthen the bull case. The strength index is at 62, suggesting bullishness in the trend. For the day, the price is expected to move in the range of Rs. 48150-48800 with a sideways bias. Only a close below Rs. 48150 would change the trend to neutral.
Strategy:
Buy MCX Gold June at Rs. 48350 with a target price of Rs. 48800 and a stop loss at Rs. 48100.
MCX Silver July futures witnessed a late recovery in prices on Thursday after declining towards the key support zone of Rs. 71000-70600. Price hit the lower band of the rising trend channel support and witnessed a rebound towards the 8-day EMA at Rs. 71900. Having said that, the zone of Rs. 70500-71000 holds key support for Silver. A failure to hold above Rs. 70500 would push the price towards Rs. 70000, followed by Rs. 68750 (Lower Bollinger Band). On the other hand, if prices held the zone then it could rebound towards the Rs. 72900-73300 levels. RSI on the daily charts is hovering around the 54 mark suggesting a sideways trend. Hence, we expect silver to trade in the range of Rs. 70800-72900 with a sideways bias. Only close below Rs. 70000 would change the trend.
Strategy:
Trading Range for MCX Silver July lies in between Rs. 70500-72900.
(Ravindra Rao, CMT, EPAT is VP-Head Commodity Research at Kotak Securities)
