Commodity prices traded higher on Tuesday, continuing the trend of the previous session. On Monday, bullion prices remained at a narrow trading range as base metals continued to soar on optimism in demand growth. Gross
ended in green after an early decline. The dollar index and US bond yields were stable ahead of the US FOMC meeting. Here is an overview of the behavior of different commodities in the current market.
Bullion prices traded stably with the COMEX spot gold price trading near $ 1,779 per ounce, while the COMEX spot silver price traded near of $ 26.12 an ounce in the morning trade. Bullion prices fluctuated between a narrow range, trading slightly lower on a firm dollar index. We expect bullion prices to trade sideways lower for the day.
The MCX Gold resistance for June for the day stands at Rs. 47,800 per 10 grams with support at Rs. 47,200 per 10 grams.
MCX Silver May support stands at Rs. 67,500 per KG, resistance at Rs. 69,800 per KG.
Outlook: crude oil
Crude oil prices traded higher against the benchmark NYMEX WTI. Crude oil prices were trading over half a percent up to $ 62.27 a barrel in the morning. Crude oil prices traded higher after a brief rally, but the rise was capped by growing demand concerns from India over rising cases of the virus. The partial foreclosure measures in India and the critical eye for the emergency in Japan have raised concerns about the recovery in fuel demand from major oil consumers. We expect crude oil prices to trade sideways higher for the day.
MCX Crude Oil May’s support stands at Rs. 4,580 per barrel with resistance at Rs. 4,720 per barrel.
Outlook: base metals
The base metals complex traded higher with most metals remaining in a positive trading range on Tuesday. Base metal prices rose on hopes of a recovery in demand and lower supply concerns. Copper prices hit their highest level since 2011 due to lower LME inventories and a possible labor strike in Chile. Positive sentiments from Europe and the US in the face of stronger demand could support base metals trade. Base metals are expected to trade sideways higher for the day.
MCX Copper May support stands at Rs. 755 and resistance at Rs. 765.
MCX May support stands at Rs. 231, resistance at Rs. 238.
MCX Nickel May support stands at Rs. 1210 with resistance at Rs. 1290.
(Tapan Patel is Senior Analyst (Commodities) at HDFC Securities)
By Ravindra Rao
MCX Gold traded sideways lower on Monday, testing a low of Rs 47,253. The 8 DMA cross below 20DMA gave the bears a slight edge. That said, resistance is set near Rs 47,670 which could serve as a supply area. Strong resistance close to Rs 47,800 above which the strength of the bear could fade. The RSI is trading near 50, indicating a sideways move. Immediate support close to yesterday’s low of Rs 47,253 then to Rs 47,100. Based on the evidence above, we now expect the price to drop near 2nd support near Rs 47,100, provided resistance of Rs 47,800 being held by bears. On the other hand, a sustained break above Rs 47,800 could reverse the intraday trend.
Sell MCX Gold June at Rs 47,650 with a target of Rs 47,250/47100 and a stop loss at Rs 47,800.
MCX Silver also fell yesterday and posted a low of Rs 68,055. However, a late rally helped silver end on a flat note. Bears still have a slight advantage as 8 DMA (68670) is still below 20DMA (69010). Having said that, immediate resistance is near Rs 69,010 and strong resistance is pegged at Rs 69,500. Likewise, support is near Rs 68,340 followed by Rs 6,850. The RSI is trading near 50, indicating sideways movement. To conclude, we expect silver to trade sideways to fall until Rs 69,500 holds. However, if the bulls manage to keep it above Rs 69,500, the trend could be reversed.
Sell MCX Silver May at Rs 69,000 with a target of Rs 68,340/68050 and a stop loss at Rs 69,400.
(Ravindra Rao, CMT, EPAT, is VP-Head Commodity Research at Kotak Securities)