Commodity prices traded mixed on Thursday, continuing the trend from the previous session. On Wednesday, bullion prices witnessed selling on Fed comments and a stronger dollar. Base metals kept to steady trading ending the session in green. Crude oil prices managed to end flat after witnessing selling pressure in the closing session, despite bullish weekly inventory data. The dollar index rallied by 0.65 per cent, gaining above the 91-mark for the day. Here is a look at how different commodities are behaving in today’s market.
Bullion prices traded steady on Thursday with spot gold price at COMEX was trading near $1817 per ounce while spot silver price at COMEX was trading marginally up at $27.05 per ounce in the morning trade. The precious metals witnessed overnight selling post the Fed’s comments as it kept policy unchanged while hinting at two rate hikes by 2023. The hawkish stance pushed the dollar higher against major currencies, triggering a sell-off in bullion. We expect bullion prices to trade sideways to down for the day.
MCX GoldMCX Silver July support lies at Rs. 69200 per KG, resistance at Rs. 71800 per KG.
Outlook: Crude Oil
Crude oil prices traded lower on Thursday as benchmark NYMEX WTI crude oil price was trading 0.28 per cent down at $71.95 per barrel in the morning trade. Crude oil prices traded under pressure on a stronger dollar, halting the five-day rally. The dollar index reported its strongest single-day gain in 15 months after the Federal Reserve signalled it might raise interest rates at a much faster pace than assumed. We expect crude oil prices to trade sideways to up for the day.
MCX Crude Oil June support lies at Rs. 5250 per barrel with resistance at Rs. 5380 per barrel.
Outlook: Base Metals
Base metals prices traded mixed on Thursday as most of the metals stayed range-bound on mixed global cues and a stronger dollar. Base metals may trade under pressure on the hint of taping stimulus from US Fed. Base metals kept to lower trading as China plans to release state reserves of Copper, Aluminium, and Zinc in a program set to last till the end of 2021. The stronger dollar may cap the base metals’ upside for the day as global markets will digest Fed’s hawkish stance. Base metals are expected to trade sideways to down for the day.
MCX Copper June support lies at Rs. 710 and resistance at Rs. 724.
MCX Zinc June support lies at Rs. 237, resistance at Rs. 243.
MCX Nickel June support lies at Rs. 1260 with resistance at Rs. 1310.
(Tapan Patel is Senior Analyst (Commodities) at HDFC Securities)
By Ravindra Rao
MCX Gold futures are trading nearly 1.5 per cent down after the Fed pushed forward projections for interest rate hikes into 2023. The short-term trend has turned negative as price breached the lower band of the rising trend channel. A trade through Rs. 48000 reaffirmed the downtrend. The next downside support is around Rs. 47550 (38.2 per cent Fibonacci level), followed by Rs. 47200. Only a sustained move above Rs. 48900 (Midline of Bollinger Band) will change the trend to positive. The momentum indicator has also weakened below 50, suggesting bearishness. The range for the day is Rs. 47200-48000.
Sell MCX Gold
MCX Silver July futures also moved lower following the yellow metal. Major support holds around Rs. 69600, which is 38.2 per cent Fibonacci level of the bull rally. Near-term resistance is seen near Rs. 71800 (20-day EMA), followed by Rs. 72850. Short-term momentum has turned negative as RSI broke down to a new low which suggests accelerating negative momentum. So for the day, the price might continue to move in the range of Rs. 69600-71800 with a sideways to downside bias. Only a closing break below Rs. 69600 would bring in renewed selling pressure and push the price towards Rs. 68250.
Sell MCX Silver July futures at Rs. 70750 with a target of Rs. 69600 and a stop loss at Rs. 71500.
(Ravindra Rao, CMT, EPAT is VP-Head Commodity Research at Kotak Securities)