Commodity prices traded weak on Thursday with most of the non-agro commodities traded under pressure for the day while crude oil prices remained exception witnessing recovery in evening session. Bullion prices traded steady limiting downside with fall in US treasury yields. Base metals prices traded weak on growing virus worries. Here is a look at how different commodities are behaving in today’s market.
Bullion prices traded firm on Friday with spot gold prices at COMEX were trading near $802 per ounce while spot silver prices at COMEX were trading marginal down at $25.85 per ounce in the morning trade. The precious metals recovered in last trading session with fall in US treasury yields. The 10 year US Treasury yields fell to the lowest level since February dipping below 1.25%. The rising worries over fast spreading Delta variant supported buying in precious metals with fall in equity indices. We expect bullion prices to trade sideways to up for the day.
MCX Gold Aug resistance for the day lies at Rs. 48000 per 10 grams with support at Rs. 47500 per 10 grams. MCX Silver September support lies at Rs. 67200 per KG, resistance at Rs. 70200 per KG.
Outlook: Crude Oil
Crude oil prices traded firm on Friday with benchmark NYMEX WTI crude oil prices were trading marginal up near $73 per barrel in the morning trade. Crude oil prices traded up with bullish weekly inventory data and higher demand prospects. The US fuel demand surged to 10 mb per day in the week leading up to the July 4th holiday according to the US Energy Information Administration. Crude oil prices capped upside on demand concerns over Delta variant spreading. We expect crude oil prices to trade sideways to up for the day.
MCX Crude Oil July support lies at Rs. 5370 per barrel with resistance at Rs. 5530 per barrel.
Outlook: Base Metals
Base metals prices traded higher on Friday with most of the metals traded with firm trading with Nickel prices rising more than 1% for the day. Base metals gained on higher demand and lower supply concerns. China refined copper output fell in the month of June, 2.4% from the May levels. Base metals may limit upside in spreading Delta variant cases across globe. Base metals may trade sideways to up for the day.
MCX Copper July support lies at Rs. 720 and resistance at Rs. 730. MCX Zinc July support lies at Rs. 238, resistance at Rs. 243. MCX Nickel July support lies at Rs. 1360 with resistance at Rs. 1420.
(Tapan Patel is Senior Analyst (Commodities) at HDFC Securities)
By Ravindra Rao
MCX GOLD futures pulled back after rallying the most in this week. Price almost rallied towards 61.8% Fibonacci retracement level(48430) of the previous down trend but failed to close above the psychological mark of 48000. However it is still holding above the 20 day
support of 47530. The next support for Aug futures holds around 47350. On the momentum front the positive crossover of MACD(12 and 26 EMA) has reserved bullish hopes for the price.So for the day price is expected to trade in the range of 47530-48400 with sideways to positive bias. Only a sustained move below 47350 would negate the bullishness in price and it would slip towards 47000.
Strategy: Buy MCX Gold Aug 47650 Target 48250 Stop loss 47350
MCX SILVER futures followed the path of the yellow metal as price erased all its gains and closed the day on the losing side. Price is hovering near the intermediate rising trend line support of 68500. A break below 68500 would extend the downside towards the key support of 67800(61.8% Fibonacci level). The Sep contract is facing resistance near 71200, and immediate resistance exists around 70250. The strength index RSI is supporting a sideways trend, as it continued to hover near the 50 mark (46). So for the day price is likely to move in the range of 68400-70250 with sideways bias. Only close below 68400 would extend the weakeness towards 67800.
Trading Range– 68400-70250
(Ravindra Rao is CMT , EPAT , VP-Head Commodity Research, Kotak Securities Ltd.)