Commodity prices traded mixed on Thursday with bullion and energy prices traded weak while base metals witnessed strong rally supported by demand growth optimism in industrial metals. Market sentiments remained mixed on stimulus package and pandemic worries. The dollar index traded lower by 0.29% falling below 91 mark. Here is a look at how different commodities are behaving in today’s market.
Bullion prices traded steady on Friday with spot gold prices at COMEX was trading flat near $1,837 per ounce while spot silver prices at COMEX was trading marginally down below $24 per ounce in the morning trade. Bullion prices witnessed range bound trading on mixed global cues as investors and traders are awaiting for US stimulus announcement while vaccine rollouts has capped upside. We expect bullion prices to trade sideways to down in current range in absence of any key triggers. Bullion prices may witness fresh buying if US finalizes the Covid-19 package deal.
MCX Gold February resistance for the day lies at Rs. 49,500 per 10 grams with support at Rs. 48,800 per 10 grams.
MCX Silver March support lies at Rs. 62500 per KG, resistance at Rs. 65000 per KG.
Outlook: Crude Oil
Crude oil prices traded higher with benchmark NYMEX WTI crude oil was trading near $47 per barrel in the morning trade. Crude oil prices traded upside on demand growth prospects as vaccine rollouts begin in UK while US may start the process in coming weeks. The approval of vaccine from UK, Canada and possibly from the US has raised optimism for fuel demand recovery. The lift in demand from China and India has also supported oil prices to trade firm. Crude oil prices are expected to trade sideways to up for the day.
MCX Crude Oil December support lies at Rs. 3,390 per barrel with resistance at Rs. 3,510 per barrel.
Outlook: Base Metals
Base metals prices traded lower on Friday paring previous gains in the morning trade as delay finalising US stimulus weighed on prices. Base metals prices are in strong bull run over demand growth recovery from China and optimism from vaccine rollouts. Copper and Nickel prices witnessed rally after ECB unveiled 500 billion euro emergency program on Thursday. The lack of progress in releasing Covid-19 aid package in US has capped buying in base metals. Base metals are expected to trade sideways to up for the day despite of weak openings.
MCX Copper December support lies at Rs. 598 and resistance at Rs. 607.
MCX Zinc December support lies at Rs. 219, resistance at Rs. 225.
MCX Nickel December support lies at Rs. 1,270 with resistance at Rs. 1,320.
(Tapan Patel is a Senior Analyst (Commodities) at HDFC securities)
By Ravindra Rao
MCX Gold February is trading in the band of 48,800-49,550 after its sharp decline from the key resistance level of 50,180. It’s upside is resisted by the 21 day EMA (49,550) and on the lower side supported by a strong support of 48,800 (resistance turned support). Meanwhile the strength index (RSI) is in the zone of 45 suggesting bears are still under control. As long as 48,800 holds on closing the bulls might have an edge, which could push price towards 49,550. However RSI needs to support the bulls by moving above 50 line.
Buy MCX Gold February at 48,850 with a target of 49,450 and stop loss at 48,600.
MCX Silver March future is consolidating in the band of 62,800-64,800. Meanwhile the lower band key support holds around 62,200 (right shoulder of inverse HNS). So as long as it holds, bulls might have the edge to push prices further towards the immediate resistance of 64,800, followed by 65,500. However failure to hold the 62,200 would negate the pattern. Meanwhile RSI is at 50 suggesting sideways trend. Hence for the day, prices seems to move in the band of 62,200-64,800 with a sideways bias.
Buy MCX Silver March at 63,000 with a target of 64,800 and stop loss at 62,200.
(Ravindra Rao is VP-Head Commodity Research at Kotak Securities)
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