Commodity prices traded firm on Wednesday with most of the commodities in non-agro segment recovered from the week’s lows on dollar decline and Brexit deal hopes. The dollar index pared gains with strength in Euro and pound losing 0.27 per cent for the day. Here is a look at how different commodities are behaving in today’s market.
Bullion prices traded marginally up on Thursday with spot gold prices at COMEX was trading near $1,875 per ounce while spot silver prices at COMEX was trading up to $25.76 per ounce in the morning trade. Bullion prices gained on dollar decline after previous volatile session. The pandemic concerns over new strain of coronavirus and increasing lockdowns has also lifted bullion prices from the support levels. We expect bullion prices to trade sideways to up for the day.
MCX Gold February resistance for the day lies at Rs. 50,400 per 10 grams with support at Rs. 49,800 per 10 grams.
MCX Silver March support lies at Rs. 66,000 per KG, resistance at Rs. 69,000 per KG.
Outlook: Crude Oil
Crude oil prices witnessed strong recovery paring weekly losses with benchmark NYMEX WTI crude oil prices was trading nearly 1 per cent up to $48.56 per barrel on Thursday. Crude oil prices recovered on weaker dollar over hopes on Breit deal and bullish weekly inventory data. The UK and European Union are close to finalise a Brexit agreement by early January. Crude oil prices are expected to trade sideways to up for the day on positive global cues.
MCX Crude Oil January support lies at Rs. 3,510 per barrel with resistance at Rs. 3,650 per barrel.
Outlook: Base Metals
Base metals prices traded higher on Thursday with Copper, Nickel and Aluminium reported gains while Zinc and Lead traded flat in the morning trade. Base metals recovered on positive global cues as UK and European Union are in final stage of the Brexit agreement which boosted regional currencies pressuring the dollar. The optimism for new relief package from US in early January may support prices to limit downside. Base metals are expected to trade sideways to up for the day.
MCX Copper December support lies at Rs. 601 and resistance at Rs. 612.
MCX Zinc December support lies at Rs. 217, resistance at Rs. 223.
MCX Nickel December support lies at Rs. 1,270 with resistance at Rs. 1,320.
(Tapan Patel is Senior Analyst (Commodities) at HDFC securities)
By Ravindra Rao
MCX Gold February held the support of 21 day EMA at 49,710 and rallied higher to close above the 5 day EMA at 50,080. The momentum is still favoring the bulls as indicated by RSI (57.3) and bullish crossover of EMA 5 and 21. Moreover price also took support of the trend line, which could be key in the near term. So as long as 49,600 holds price is expected to move towards the initial resistance of 50,680. Only a sustained move above 50,680 would push the price towards 51,000. On the flipside a move below 49,600 would pause the bullish momentum in gold futures.
Strategy: Buy MCX Gold Feb at Rs 49,900 with a target of Rs 50,600 and a stop loss at Rs 49600.
MCX Silver March future witnessed recovery from the earlier breakout resistance turned support zone near 66,400. Price also got support from the lower band of the rising trend channel near 66,400-66,000, which would be a key level for the near term. If the bulls succeed in holding the support near 66,000 a rebound towards 68,500 is a possibility which might be followed by 69,700. Failure to hold the support would weaken the price towards 65,080 (21 Day EMA). To conclude the price trend is still trading with a bullish bias as supported by crossover of 5 and 21 day EMA along with firm RSI at 62.
Strategy: Buy MCX Silver Mar at Rs 66,800 with a target of Rs 68,500/69,500 with a stop loss at Rs 65050.
(Ravindra Rao is VP-Head Commodity Research at Kotak Securities)
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