Commodity prices traded mixed on Tuesday, continuing the trend from the previous session. On Monday, bullion prices kept to a narrow range trading, while crude oil prices witnessed a decline on demand-growth concerns. Base metals traded weak on worries over delta variant cases. The dollar index ended marginally higher at 91.89 for the day. 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 price at COMEX was trading near $1775 per ounce while spot silver price at COMEX was trading marginally lower at $26 per ounce in the morning trade. The precious metals witnessed range-bound trading as market players are awaiting fresh cues from US employment data this week. Bullion prices have kept to a steady trading range on the firm dollar and worries over rising cases of Covid-19’s delta variant across the globe. We expect bullion prices to trade sideways to up for the day.
Trading Strategy:
MCX Gold August futures’ resistance for the day lies at Rs. 47200 per 10 grams with support at Rs. 46600 per 10 grams.
MCX Silver September support lies at Rs. 67000 per KG, resistance at Rs. 70200 per KG.
Outlook: Crude Oil
Crude oil prices traded weak on Tuesday as benchmark NYMEX WTI crude oil prices were trading 0.38% lower at $72.63 per barrel in the morning trade. Crude oil prices traded lower on-demand growth concerns as rising delta variant cases across the globe may dampen fuel demand recovery.
The UK reported its highest daily rise in Covid-19 cases on Monday since January 30. Hong Kong, Spain, and Portugal banned all passenger flights from the nation to curb the spread of outbreaks of Covid-19’s delta variant. The speculation ahead of OPEC plus meeting next week and US summer driving season demand may keep oil prices on the edge for the short term. We expect crude oil prices to trade sideways to down for the day.
Trading Strategy:
MCX Crude Oil July support lies at Rs. 5330 per barrel with resistance at Rs. 5470 per barrel.
Outlook: Base Metals
Base metals prices traded lower on Tuesday as most of the metals witnessed selling on renewed virus worries and demand growth concerns. Rising cases of the delta variant have led to lockdown restrictions in Europe and parts of Australia. Aluminium prices may get support from supply concerns after Russia increases taxes. Base metals may trade sideways to down on the stronger dollar and mixed global cues for the day while waiting for fresh triggers from US data.
Trading Strategy:
MCX Copper July support lies at Rs. 705 and resistance at Rs. 720.
MCX Zinc July support lies at Rs. 230, resistance at Rs. 238.
MCX Nickel July support lies at Rs. 1310 with resistance at Rs. 1390.
(Tapan Patel is Senior Analyst (Commodities) at HDFC Securities)
By Ravindra Rao
MCX Gold August futures have moved in a sideways range during the entire day on Monday. The market continues to face a lot of resistance near the Rs. 47350 level. If the price could break above Rs. 47350 (250-day EMA) levels, then it might rally towards the next resistance zone between Rs. 47700-47900. On the downside, if the price breaks below Rs. 46600, it could fall towards Rs. 46250. On the momentum front, MACD has turned negative, due to the histograms turning negative, suggesting a sideways to weaker trend. So for the day, the trading range seems to be between Rs. 46600-47250.
Strategy:
The trading range for MCX Gold August futures lies between Rs. 46600-47250.
MCX Silver September futures continued to move in a sideways trend following the yellow metal on Monday. For the September futures series, Rs. 68400 holds as key support. If the price fails to hold the said levels then it would weaken towards Rs. 67600. Similarly on the upside, Rs. 69900 holds as a key resistance. If it manages to settle above Rs. 69900, then it would test the next key resistance zone of Rs. 71550. Short-term momentum has turned negative as RSI is hovering near 39. So for the day, the price might continue to move in the range of Rs. 68400-69900 with a sideways bias.
Strategy:
The trading range for MCX Silver September futures lies between Rs. 68400-69900.
(Ravindra Rao, CMT, EPAT is VP-Head Commodity Research at Kotak Securities)
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