Commodity prices soared on Tuesday, taking cues from a strong global trend as the commodity prices continued its winning streak from Monday with most of the commodities in the non-agro segment reported gains of over 1 per cent in the previous session. Crude oil prices continued surging to multi-month highs on stronger demand prospects. Bullion prices gained on weaker dollar over stimulus hopes. Here is a look at how different commodities are behaving in today’s market.
Outlook: Bullion
Bullion prices traded higher for the third day with spot gold price at COMEX was trading with over half a percent gains near $1,840 per ounce while spot silver price at COMEX waas trading at $27.50 per ounce rallying 0.86 per cent in the morning trade. Bullion prices continued upside move on US stimulus hopes after US democrats released first draft of key legislation including Biden’s covid relief bill. Precious metals also got support from weaker dollar index which was trading below 91 mark in early trade. We expect bullion prices to trade sideways to up for the day.
Trading Strategy:
MCX Gold April resistance for the day lies at Rs. 48,200 per 10 grams with support at Rs. 47,800 per 10 grams.
MCX Silver March support lies at Rs. 68,000 per KG, resistance at Rs. 72,500 per KG.
Outlook: Crude Oil
Crude oil prices traded near 13 months highs with benchmark NYMEX WTI crude oil prices were trading up by 0.78 per cent to $58.42 per barrel on Tuesday. Crude oil prices were boosted by lower supply concerns from major oil producers and demand recovery from stimulus hopes. The additional supply cuts from Saudi Arabia till March has achieved some of the target of the balancing oil market. Crude oil prices are expected to trade up for the day on positive global cues.
Trading Strategy:
MCX Crude Oil February support lies at Rs. 4,210 per barrel with resistance at Rs. 4,320 per barrel.
Outlook: Base Metals
Base metals complex traded positive with most of the metals witnessed buying on Tuesday with Nickel gaining the most. Base metals prices gained on weaker dollar and stimulus hopes along with lower supply from China on Lunar day holidays. Copper prices gained as future contracts entered into backwardation on supply crunch. Base metals are expected to trade sideways to up for the day.
Trading Strategy:
MCX Copper February support lies at Rs. 621 and resistance at Rs. 627.
MCX Zinc February support lies at Rs. 210, resistance at Rs. 214.
MCX Nickel February support lies at Rs. 1,310 with resistance at Rs. 1,360.
(Tapan Patel is a Senior Analyst (Commodities) at HDFC Securities)
By Ravindra Rao
MCX Gold April future continued its rebound and price has closed above the bullish inside candle pattern high at Rs 47,673. Meanwhile, price is trading above the 5 day EMA (47,670) which also strengthened the rally in price rise. The recovery in Gold futures got support from the reversal in RSI. The strength index has moved above 40 after testing the oversold zone of 20, which suggests a recovery phase in gold might be witnessed. Now the key resistance for the price exists around Rs 48,450 (200 DEMA), which could be the objective in the near term. Going by the above analysis, price is expected to move in the band of Rs 47,600-48,450 with sideways to positive bias. Only close below Rs 47,100 would weaken the recovery.
Strategy:
Buy MCX Gold April at Rs 47,670 with a target of Rs 48,400 and a stop loss at Rs 47,200.
MCX Silver March futures continued its rally on Monday as it held the support of 50 DAY EMA (66,530) and lower band of upward sloping channel. Meanwhile, price has moved above the 21 day EMA (67,980), which could be the key support for the day and any dip towards the same might attract buying. On the upside, key resistance exists around Rs 71,300, followed by Rs 72,670. On the momentum front, RSI has moved above the midline (56) suggesting sideways trend. For the day price is expected to move in the range of Rs 68,000-72,670 with a sideways to positive bias. Only a close below Rs 66,300 would reverse the trend to neutral.
Strategy:
Buy MCX Silver March at Rs 69,200 with a target of Rs 72,600 and a stop loss at Rs 67,900.
(Ravindra Rao is VP-Head Commodity Research at Kotak Securities)
