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Commodity prices traded mixed on Wednesday, continuing the trend from the previous session as bullion prices rallied while crude oil prices continued to fall despite the rally in stock indices and the complex in base metals traded on Tuesday on Chinese demand concerns. Here is an overview of how different products are performing in today’s market.
Perspectives: Ingots
Bullion prices traded steadily, the COMEX spot price of gold was trading near $1712 per ounce while the COMEX spot price of silver was trading near 25, $78 an ounce in morning trade. Bullion prices have seen a rally, with the price of gold recovering from nine-month lows as US bond yields fell from one-year highs while the dollar index compensated three and a half month highs. The rally in stock indices and the firm dollar could limit the rise in precious metals for the day. We expect bullion prices to trade sideways higher for the day.
Commercial strategy :
MCX Gold April resistance for the day stands at Rs. 45100 per 10 grams with support at Rs. 44500 per 10 grams.
MCX Silver May support stands at Rs. 65000 per KG, resistance at Rs. 68500 per KG.
Outlook: Crude Oil
Crude oil prices traded lower with benchmark NYMEX WTI crude oil prices trading down 0.70% at $63.56 a barrel in morning trade. Crude oil prices saw a selloff on expectations of a weekly inventory build after the US API report showed an inventory build of 12.79mb. Traders also weighed in on the damage from the attack on Saudi oil facilities as operations were less affected. Crude Oil prices are expected to trade sideways lower for the day.
Commercial strategy :
MCX Crude Oil March support stands at Rs. 4580 per barrel with resistance at Rs. 4720 per barrel.
Outlook: Base Metals
The base metals complex traded mixed on Wednesday, with copper prices trading firm on fears of supply shortages, while the rest of the metals traded slightly lower on demand concerns. from China. Copper prices rose due to a possible labor strike in Chile. Workers at Antofagasta Plc’s biggest copper mine, Los Pelambres, have rejected the company’s final wage offer. The mine produced 372,100 tonnes last year. Base metals are capped higher despite positive global signals on policy tightening in China, which could hurt demand growth. Base metals are expected to trade sideways higher for the day.
Commercial strategy :
MCX Copper March support stands at Rs. 670 and resistance at Rs. 682.
MCX Zinc March support stands at Rs. 213, resistance at Rs. 219.
MCX Nickel March support stands at Rs. 1150 with resistance at Rs. 1190.
(Tapan Patel is Senior Analyst (Commodities) at HDFC Securities)
By Ravindra Rao
MCX Gold April futures saw a rebound from the key support zone of Rs 44,150 as the price held support at the lower band of the downward sloping trend channel. Meanwhile, the price is trading in a downward sloping middle channel after slipping below the long-term trendline support near Rs 45200. The negative crossover of 5 (44850) and 21 (46050) day EMA could limit earnings. On the downside, the key support holds around Rs 44150, followed by Rs 43900. The strength index, RSI (34) which erased its losses and moved above 30 indicates a pullback. However, it needs to hold above 30 to restore momentum for the price rally. According to the above analysis, the price is likely to move within the Rs 44150-45200 band with a sideways bias. Only closing above Rs 45,200 would extend its gains further towards Rs 45,500.
Strategy:
Buy MCX Gold April at Rs 44450 with a target of Rs 45100 and a stop loss at Rs 44100.
MCX Silver May futures saw a nice bounce as the price broke above the 5-day EMA of Rs 66,880 and entered the previous consolidation band of Rs 66,400-69,400. Meanwhile, the price is trading below the 21 (67910) day EMA, which could be the first hurdle of the day. A sustained move above would push prices towards the next resistance of Rs 68600, followed by Rs 69400. On the momentum form, the RSI is trading around 50 (48), suggesting a sideways trend. Therefore, for the day, the price is likely to move within the range of Rs 65,800-67,900 with a sideways bias.
Strategy:
Buy MCX Silver May at Rs 66,500 with a target of Rs 67,800 and a stop loss at Rs 65,800.
(Ravindra Rao is VP-Head Commodity Research at Kotak Securities)
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