Commodities

Commodity strategies: Gold, silver, crude, base metals

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By Tapan Patel

Commodity prices traded weak on Thursday, after trading on a mixed be aware in the previous session. On Wednesday, bullion prices kept to the lower trading range on a stronger dollar while crude oil prices pared gains and ended in red post inventory data. Base metals also kept to the narrow trading range on lack of economic data and mixed global cues. The dollar index ended 0.05 per cent higher for the day. Here is a look at how different commodities are behaving in today’s market.

Outlook: Bullion
Bullion prices traded weak on Thursday, as spot gold price at COMEX was trading near $1886 per ounce while spot silver price at COMEX was trading marginally down at $27.70 per ounce in the morning trade. The precious metals kept to a lower trading range on a steady dollar and despite a fall in US treasury yields. Market participants are waiting for fresh cues from the US inflation data due today as the US CPI data will present more clarity on Fed’s policy actions. The 10-year US Treasury yields fell below 1.50 per cent, followed by a strong auction. We expect bullion prices to trade sideways to down for the day.

Trading Strategy:

MCX Gold August resistance for the day lies at Rs. 49500 per 10 grams with support at Rs. 48800 per 10 grams.

MCX Silver July support lies at Rs. 70200 per KG, resistance at Rs. 72800 per KG.

Outlook: Crude Oil

Crude oil prices traded lower on Thursday as benchmark NYMEX WTI crude oil price was trading 0.77 per cent down at $69.42 per barrel in the morning trade. Crude oil prices traded under pressure on demand worries from the US summer driving season with a rise in product inventories. US gasoline inventories rose by more than 7 Mb, leading to a second weekly gain, while weekly crude oil inventories fell by 5.2 Mb. We expect crude oil prices to trade sideways to down for the day.

Trading Strategy:

MCX Crude Oil June support lies at Rs. 5020 per barrel with resistance at Rs. 5160 per barrel.

Outlook: Base Metals

Base metals prices traded weak on Thursday with most of the metals traded under pressure in the morning trade. Base metals traded weak on demand concerns from China and mixed global cues ahead of US inflation data. The US consumer price data will be one of the last major financial experiences earlier than the Fed’s subsequent coverage meeting. Copper prices are fluctuating on mixed fundamentals and supply concerns from Chile. Base metals are expected to trade sideways to down for the day.

Trading Strategy:

MCX Copper June support lies at Rs. 735 and resistance at Rs. 748.

MCX Zinc June support lies at Rs. 232, resistance at Rs. 242.

MCX Nickel June support lies at Rs. 1290 with resistance at Rs. 1350.

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

By Ravindra Rao

MCX Gold August futures have been trading in a sideways range between Rs. 49400-48700 since the last few days. The price is holding firmly above the trend-line break and is moving inside the rising channel, suggesting a continuation of the bull trend. Immediate resistance for the August futures exists around Rs. 49400, followed by Rs. 49700. On the lower end, immediate support holds around Rs. 48600, followed by Rs. 48400. RSI on the daily charts is hovering near 60, supporting the bull case. Hence, any dip towards the support of Rs. 48800-48750 zone would attract buyers and push prices further towards Rs. 49400-49700 zone. Only a close below Rs. 8400 would negate the view and the trend would turn neutral.

Strategy:

Buy MCX Gold August at Rs. 48750 with a target of Rs. 49400 and a stop loss at Rs. 48400.

MCX Silver July futures are hovering in a tight range for the last couple of weeks. Earlier, prices have witnessed a good rebound from the lower Bollinger band support near Rs. 70000 and closed above the midline of the band Rs. 71750, which has negated the bearish bias in the price. RSI on the daily charts is hovering around 50 suggesting a sideways trend. So in the near term, the price might continue to move in the range of Rs. 70100-72850 with a sideways bias. Only a closing break above the Rs. 72850-73500 zone would extend the upside.

Strategy:

The trading range for MCX Silver July futures lies between Rs. 70100-72850

(Ravindra Rao, CMT, EPAT is VP-Head Commodity Research at Kotak Securities)

(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)

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Source: Commodity strategies: Gold, silver, crude, base metals

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