Commodity strategies: Gold, silver, crude, base metals

By Ravindra Rao


Gold Aug futures moved higher on Thursday, but remained range-bound ahead of US jobs data due later today. The key price resistance exists around Rs 47,350 (250-day EMA). A break above Rs 47,350 will push it towards Rs 47,700-47,900 zones. On the flip side, if the price remains below Rs 47,350, then it will drift towards the key support level of Rs 46,600-46,260 levels. The current reading on the RSI is 41, supporting bears. For the day, the price is expected to trade in a range of Rs 46,600-47,350 with a sideways bias. Only a close on either side of the range would bring more clarity in the trend, which is possible after the US jobs data release.

Trading Range: Rs 46,600-47,350

MCX SILVER Sep future rallied towards the immediate resistance of Rs 69,900 (8-day EMA) on Thursday, but failed to sustain above its resistance level and closed the session with a minor gain. The immediate trend seems to be sideways ahead of today’s US payrolls data. The support holds around 61.8% Fibonacci level at Rs 67,800, followed by Rs 66,900. The immediate resistance is seen around Rs 69,900 (8-day EMA), a key level. A move above Rs 69,900 would confirm the reversal and push price towards Rs 71,550. Meanwhile, momentum indicator RSI is supporting the sideways trend as it is hovering near 46. For the day, the price might continue to move in the range of Rs 68,000-69,900 with a sideways bias.

Trading Range: Rs 68,000-69,900

(Ravindra Rao is VP-Head Commodity Research, Kotak Securities Ltd. Views are his own)

By Tapan Patel


Commodity prices traded mixed on Thursday with most of the commodities in non-agro segment, except base metals, staying firm. Bullion prices traded steady on mixed US data while crude oil prices rallied on strong demand and OPEC struggle. Base metals traded under pressure on disappointed US manufacturing data and weak China cues. Here is a look at how different commodities are behaving in today’s market.

Outlook: Bullion

Bullion prices traded firm on Friday with spot gold prices at COMEX trading near $1,778 per ounce while spot silver prices at COMEX trading marginally up at $26.04 per ounce in morning trade. The precious metals traded firm after weaker than expected US manufacturing PMI and another stimulus approval. The US House approved a $715 billion surface transportation and water infrastructure bill on Thursday. Market players are awaiting key US employment data in the evening session today. We expect bullion prices to trade sideways to up for the day.

Trading Strategy: MCX Gold Aug resistance for the day lies at Rs 47,600 per 10 gram with support at Rs 46,800 per 10 gram. MCX Silver September support lies at Rs 67,800 per kg, resistance at Rs 71,200 per kg.

Outlook: Crude Oil

Crude oil prices traded steady on Thursday with benchmark NYMEX WTI crude oil trading above $75 per barrel in morning trade. Crude oil prices gained on delayed OPEC plus decision on output quota. The disagreement amongst members on increasing oil output has boosted buying in crude oil following stronger demand. The OPEC plus group will resume talks on Friday to reach any agreement. We expect crude oil prices to trade sideways to up for the day.

Trading Strategy: MCX Crude Oil July support lies at Rs 5,540 per barrel with resistance at Rs 5,680 per barrel.

Outlook: Base Metals

Base metals prices traded mixed on Friday with most of the metals in firm trading range ahead of US employment data. Base metals witnessed some selling post US manufacturing data which came lesser than expected. Aluminium prices continued upside on lower supply fears from China and taxation form Russia. Base metals may limit gains for the day on weak Chinese markets on speculation over policy tightening. Base metals may trade sideways to down on mixed global cues for the day.

Trading Strategy: MCX Copper July support lies at Rs 712 and resistance at Rs 725. MCX Zinc July support lies at Rs 234, resistance at Rs 242. MCX Nickel July support lies at Rs 1,320 with resistance at Rs 1,390.

(Tapan Patel is Senior Analyst (Commodities), HDFC Securities)