Commodity prices traded higher on Thursday, with continuing buying spree supported by weaker dollar over stimulus hopes. Most of the commodities in non agro segment rose by more than 1 per cent for the day with natural gas being the exception. The dollar index fell below 90 mark for the first time since April 2018. Here is a look at how different commodities are behaving in today’s market.
Bullion prices traded steady on Friday keeping the firm trading range with spot gold prices at COMEX was trading above $1,882 per ounce while spot silver prices at COMEX was trading below $26 per ounce in the morning trade. Bullion prices rallied on US stimulus expectations by this week as lawmakers were in final negotiations of relief package. The fall in dollar index boosted buying in precious metals post US FOMC meet over more bond buying programme from US Fed. We expect bullion prices to trade sideways to up for the day after witnessing some correction in early trading.
MCX Gold February resistance for the day lies at Rs. 50,600 per 10 grams with support at Rs. 49,900 per 10 grams.
MCX Silver March support lies at Rs. 66,000 per KG, resistance at Rs. 69,500 per KG.
Outlook: Crude Oil
Crude oil prices traded weak on Friday morning with benchmark NYMEX WTI crude oil prices were trading marginally down at $48.25 per barrel. Crude oil prices traded under pressure on worries over rising virus cases and delaying relief package from US. Crude oil prices have touched the resistance range of $48-$50 on risk-on sentiments over vaccine rollouts and stimulus hopes. Crude oil prices are expected to trade sideways to up for the day on mixed global cues.
MCX Crude Oil January support lies at Rs. 3,510 per barrel with resistance at Rs. 3,630 per barrel.
Outlook: Base Metals
Base metals prices continued upside on Friday with most of the metals are trading over half a percent up in the morning trade. Base metals rallied on weaker dollar and stimulus hopes in line with demand growth optimism. Copper prices are trading higher on lower inventory levels in SHFE and LME combined. Base metals prices are in strong bull run over demand growth recovery from China and optimism from vaccine rollouts. Base metals are expected to trade sideways to up for the day.
MCX Copper December support lies at Rs. 610 and resistance at Rs. 620.
MCX Zinc December support lies at Rs. 221, resistance at Rs. 226.
MCX Nickel December support lies at Rs. 1305 with resistance at Rs. 1350.
(Tapan Patel is a Senior Analyst (Commodities) at HDFC securities)
By Ravindra Rao
MCX Gold February future went past the key resistance at 50,180 with breakout of the downward sloping trend line. There is also the formation of a bullish (Flag) continuation pattern which supported the bullish momentum in gold .The bull case is also strengthened by the positive crossover of EMA’s 5 (49,721) and 21 (49,540). Moreover, the firm RSI at 63.2 reinforced the rally. Key resistance for the February future is around 50,650, which could also be the target for the day.
Buy MCX Gold Feb at Rs 49,900 with a target of Rs 50,650 and a stop loss at Rs 49,650.
MCX Silver March future has rallied towards the key level at 68,200 after breaching the resistance of broad consolidation at 66,000. Immediate resistance is near 68,400 and support zone is around 66,500 which could be the ideal demand zone. Meanwhile the bullish rally in Silver got support from RSI (76) and positive crossover of 5 (65,900) and 21 (63,800) day EMA. Prices need to sustain above 68,500 to extend its rally further towards the inverse head and shoulder target near 70,000.
Buy MCX Silver Mar at Rs 66,800 with a target of Rs 68,400 and a stop loss at Rs 65,800.
(Ravindra Rao is VP-Head Commodity Research at Kotak Securities)
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