The Economic Times daily newspaper is available online now.

    Commodity strategies: Gold, silver, crude, base metals

    Synopsis

    Crude oil prices are capped downside on stronger fuel demand recovery from the US and China, while an ease in lockdown measures in Europe have improved investment sentiments.

    Commodity outlook shutterstock_441099742Shutterstock.com
    By Tapan Patel

    Commodity prices traded firm on Thursday, after trading mixed in the previous session. On Wednesday, bullion prices pared previous losses and ended in the green while crude oil prices ended lower for the day post weekly inventory data. Base metals traded mixed keeping a steady trading range on mixed global cues. Here is a look at how different commodities are behaving in today’s market.

    Outlook: Bullion
    Bullion prices traded firm with spot gold prices at COMEX were trading near $1788 per ounce while spot silver prices at COMEX were trading marginally up near $26.47 per ounce in the morning trade. Bullion prices witnessed recovery on Wednesday evening session after US treasury secretary clarified over her previous statement on interest rates. She clarified that she is neither predicting nor recommending a hike in key interest rates. We expect bullion prices to trade sideways to up for the day following inflation concerns.

    Trading Strategy:
    MCX Gold June resistance for the day lies at Rs. 47400 per 10 grams with support at Rs. 46800 per 10 grams.
    MCX Silver May support lies at Rs. 67500 per KG, resistance at Rs. 71500 per KG.

    Outlook: Crude Oil
    Crude oil prices traded higher with benchmark NYMEX WTI crude oil prices traded marginally up to $65.67 per barrel in the morning trade. Crude oil prices are fluctuating between pandemic worries and economic recovery, raising demand hopes. While, crude oil prices are capped downside on stronger fuel demand recovery from the US and China, while an ease in lockdown measures in Europe have improved investment sentiments. The EIA report showed large inventory draw of 7.99 mb in line with market expectations. We expect crude oil prices to trade higher for the day.

    Trading Strategy:
    MCX Crude Oil May support lies at Rs. 4820 per barrel with resistance at Rs. 4970 per barrel.

    Outlook: Base Metals
    Base metals prices traded higher as most of the metals kept to firm trading range awaiting key economic data from US this week. Base metals may see some buying support with the reopening of Chinese markets after holidays. Copper and Aluminium prices witnessed buying on higher demand woes and supply concerns. Aluminium prices may get some boost over trade tensions between China and Australia. China has "indefinitely” suspended all activities under the China-Australia Strategic Economic Dialogue, amid strained relations between Beijing and Canberra. Base metals are expected to trade sideways to up for the day.

    Trading Strategy:
    MCX Copper May support lies at Rs. 760 and resistance at Rs. 767.
    MCX Zinc May support lies at Rs. 228, resistance at Rs. 236.
    MCX Nickel May support lies at Rs. 1290 with resistance at Rs. 1340.

    (Tapan Patel is Senior Analyst (Commodities) at HDFC Securities)

    By Ravindra Rao

    MCX Gold futures traded in a broad range of Rs. 46600-47100 as the price moved in a sideways zone. However, the bulls have once again pushed the price closer to the resistance level of of Rs. 47100. Price is trading close to the 8 DMA which is still above the 20 DMA indicating a slight bullish bias. Support for the day is pegged at Rs. 46700 and a strong support is near Rs. 46500. Resistance can be seen near Rs. 47100 followed by Rs. 47400. RSI is still below 50 (47.30), but might move above 50 today if the bulls push the price above Rs. 47100. Going by the above analysis, we expect the price to trade higher provided the bulls penetrate the resistance of Rs. 47100 on a 4hr closing basis. In that scenario, the profit objective would be till Rs. 47400. Till then we expect a range bound trade between Rs. 47100-46700.

    Strategy:
    Buy MCX Gold June above Rs. 47100, with a target price of Rs. 47400 and a stop loss at Rs 46900.

    MCX Silver witnessed a good rebound after testing a low near Rs. 68800 ending the day flat near Rs. 69600. A higher 8 DMA as against the 20 DMA is supporting the prices. However, the price is still below the 8 DMA which is limiting the gains. Having said that, the 8 DMA near Rs. 69900 would act as the resistance for the day. Above that, the resistance would be Rs. 71000. Similarly 20 DMA would act as the support which is near Rs. 69200 and below that the next support would be Rs. 68600. RSI is above 50 (54) indicating a sideways to higher move in today’s session. To conclude, we expect silver to trade with a sideways to positive bias until Rs. 68600 holds. A break above Rs. 69900 on a 4hr closing might give bulls the required edge to take it close to Rs. 71000.

    Strategy:
    Buy MCX Silver July at Rs. 69250, with a target price of Rs. 70600 and a stop loss at Rs. 68600.

    (Ravindra Rao, CMT, EPAT is VP-Head Commodity Research at Kotak Securities)



    (Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)
    (What's moving Sensex and Nifty Track latest market news, stock tips and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more


    (What's moving Sensex and Nifty Track latest market news, stock tips and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
    The Economic Times

    Stories you might be interested in