Commodity prices traded higher on Friday as most of the non-agro commodities traded with a positive bias supported by broader dollar weakness. Crude oil prices continued to trade higher after OPEC plus eased output cuts lesser than the earlier proposal. The investors sentiments remained muted over vaccine progress and stimulus hopes. The dollar index fell below 90 mark losing more than 1 per cent during the week. Here is a look at how different commodities are behaving in today’s market.
Bullion prices traded steadily on Monday with spot gold prices at COMEX were trading flat at $1838 per ounce while spot silver prices at COMEX were trading marginally down near $24.07 per ounce in the morning trade. Bullion prices continued upside move over US stimulus hopes which is likely to be passed in the current week. The weak payroll data may also support bullion prices to trade firm. We expect bullion prices to trade sideways to up during the day over weaker dollar.
MCX Gold February resistance for the day lies at Rs. 49500 per 10 grams with support at Rs. 48900 per 10 grams.
MCX Silver March support lies at Rs. 62000 per KG, resistance at Rs. 65000 per KG.
Outlook: Crude Oil
Crude oil prices were trading lower in the morning as benchmark NYMEX WTI crude oil were down to $46 per barrel. Crude oil prices pared previous gains as surge in Covid-19 cases brought fear of more lockdowns after few states in US imposed lockdown measures. Crude oil prices may restrict to upside move towards $48 over easing of output cuts from OPEC plus nations along with increased supplies from Libya and Iraq. Crude oil prices are expected to trade sideways to down for the day.
MCX Crude Oil December support lies at Rs. 3340 per barrel with resistance at Rs. 3460 per barrel.
Outlook: Base Metals
Base metals prices traded under pressure on Monday morning session as firm dollar triggered some profit booking. Base metals have continued strong bullish run in previous week while fear of more lockdown in US over rising virus cases has raised concerns over demand growth. Copper prices traded under pressure as copper inventories at SHFE reported first weekly increase since October. Base metals are expected to trade sideways to down witnessing some correction for the day.
MCX Copper December support lies at Rs. 589 and resistance at Rs. 596.
MCX Zinc December support lies at Rs. 210, resistance at Rs. 217.
(Tapan Patel is a Senior Analyst (Commodities) at HDFC securities)
By Ravindra Rao
MCX GOLD February continued to consolidate in the range of 48950-49550 since the last few days. The lower bound is supported by 5 day EMA along with 38.2 per cent Fibonacci retracement level of the recent fall. Likewise the higher bound is resisted by 21 day EMA at 49550. However the reversal in strength index RSI from the oversold zone to 47 supported the sideways to positive trend. For the day the price is expected to move in the range of 48950 to 49550 with sideways bias. Only a sustained move on either side would bring more clarity to the trend.
Buy MCX Gold February at 48950 with target at Rs 49550 and stop loss at Rs 48600.
MCX SILVER March future remained bounded in a range of 62870-64500 since last few sessions. The higher range is resisted by 78.6 per cent Fibonacci retracement of the recent downfall. Likewise the lower band got support from 9 day EMA at 62870. Meanwhile RSI has moved above 50(at 56) which supported the bull case in recent rally. There is also an Inverse HNS being formed, the neckline resistance of which is above 64,500. Any breach of this level might give bulls the edge. For the day move on the either side of the range would decide further trend in price and one should watch for the inverse HNS break.
Buy MCX Silver March at 62920 with a target at 64500 and stop loss 62100.
(Ravindra Rao is VP-Head, Commodity Research at Kotak Securities)
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