Commodity prices traded positive with most of the commodities in the non-agro segment ending in the green on Thursday despite a firm dollar. Gold prices pared early losses with fall in US treasury yields. Base metals traded higher on demand growth prospectus, while crude oil prices rallied with positive global cues on bargain buying. Here is a look at how different commodities are behaving in today’s market.
Outlook: Bullion
Bullion prices traded steady on Friday with spot gold prices at COMEX trading near $1803 per ounce, while spot silver prices at COMEX were trading marginally down at $25.32 per ounce. The precious metals witnessed some recovery in Thursday evening session with gold prices gaining above $1800 with fall in US treasury yields and silver prices rallying with firm base metals. Overall bullion prices traded under pressure on stronger dollar with rise in virus cases across the globe. We expect bullion prices to trade sideways to down for the day.
Trading Strategy
MCX Gold August resistance for the day lies at Rs 47900 per 10 grams with support at Rs 47200 per 10 grams. MCX Silver September support lies at Rs 66200 per KG, with resistance at Rs 68500 per KG.
Outlook: Crude Oil
Crude oil prices traded weak on Friday with benchmark NYMEX WTI crude oil prices trading 0.46% down near $71.58 per barrel. Crude oil prices rallied above $70 outweighing rising Covid cases worries on positive global cues. The rally in equity indices and prices below $70 attracted long-term investors on higher demand outlook in the second half of the year. However, concerns of a fresh wave of Covid cases in Europe and other parts of the world may keep oil prices under check. We expect crude oil prices to trade sideways to up for the day.
Trading Strategy
MCX Crude Oil August support lies at Rs 5260 per barrel with resistance at Rs 5420 per barrel.
Outlook: Base Metals
Base metals prices traded higher on Friday with most of the metals witnessing positive opening following strong global cues. Copper and Nickel prices traded higher on a strong demand outlook. Aluminium prices may trade under pressure on higher supply expectations in the second half of the year as the China supply is expected to rise by 8%. Base metals are supported by strong equity indices despite ECB worries of a fresh wave of virus cases. Base metals may trade sideways to up for the day.
Trading Strategy
MCX Copper July support lies at Rs 739 and resistance at Rs 752. MCX Zinc July support lies at Rs 240 with resistance at Rs 247. MCX Nickel July support lies at Rs 1410 with resistance at Rs 1460.
(Tapan Patel is Senior Analyst (Commodities) at HDFC Securities)
By Ravindra Rao
MCX Gold August futures erased all its losses on Thursday after testing the multiple support zone near Rs 47,350 (252-Day
). Currently, the price is consolidating with lower bound support near Rs 47300-47160 zone and higher band resistance near Rs 48450. The immediate resistance for August futures exists around Rs 47880 (8-day EMA). Price has to move above Rs 47880 to extend its rebound and rally towards the higher band of consolidation at Rs 48450. The momentum indicator, RSI, is still hovering near 50 (47), suggesting sideways bias. For the day, price is expected to consolidate in the band of Rs 47350-47880 with a positive bias. Only a close above Rs 47880 would bring fresh buying momentum.
Trading Range: Rs 47160-47880
After a good rebound from the rising trend line support near Rs 66280,
MCX Silver is holding on to the gains. Price also held the support of lower Bollinger band (-2 SD) at 66750, suggesting a phase of recovery in price. The rebound in the strength index from the oversold zone (30) towards 40 (38) has supported the bounce back. Meanwhile, resistance for silver is seen near 68000 (8 day EMA), followed by 68800 (Midline of Bollinger band). For the day, price is expected to move in the range of Rs 66280-68000 with a sideways bias. Only a close above Rs 68000 would turn the trend higher. On the other hand, if it closes below Rs 66280, then the overall trend would turn negative.
Trading Range: 66280-68800
(Ravindra Rao is CMT, EPAT is VP-Head Commodity Research at Kotak Securities)
