MCX Gold futures have breached the lower bound of the consolidation phase support at Rs 46,620 and witnessed a sharp decline towards the previous month’s low at Rs 45,635. Strong US retail sales numbers has strengthened Fed’s monetary tightening hopes, which weighed over bullion prices to decline more than 1.5% in a single day. For the day, Rs 45,635 holds key support. If price fails to hold it, then the trend would turn weaker and price would decline towards Rs 45,300 level. On the flip side, if price holds the support of Rs 45,635 then it would rebound towards the immediate resistance at Rs 46,480 and Rs 46,700. The momentum oscillator RSI has moved lower (36), supporting the bears. So in the near term, the price is expected to move in the range of Rs 45,635-46,700 with a sideways to downside bias.
Trading Range: Rs 45,635-46,700
MCX Silver futures followed the yellow metal and lost almost 4% on Thursday to close below the previous key support at Rs 61,200. Silver made a new low on Thursday, forming a lower high-lower low pattern, which suggests a bearish bias. The breakdown of the bear flag could push the price towards the next target support towards Rs 59,500, followed by Rs 57,900. On the momentum front, RSI has dipped towards 30 (33), supporting weakness in the trend. So for the day, the price might consolidate in the band of Rs 60,500-62,400 with a sideways to downside bias. Only a sustained move below Rs 60,500 would bring fresh selling interest in silver futures and push it towards Rs 59,500.
Trading Range: Rs 60,500-62,400
(Ravindra Rao is CMT , EPAT, VP-Head Commodity Research, Kotak Securities Ltd. Views are his own)
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 up 0.38% near $1,758 per ounce while spot silver prices at COMEX marginally up near $22.95 per ounce in morning trade. The precious metals plunged on Thursday with gold prices falling to five-week lows following strong US retail sales data. The better-than-expected data has raised market speculation of sooner Fed tapering. Bullion prices may trade sideways to down for the day.
Gold October resistance for the day lies at Rs 46,400 per 10 gram with support at Rs 45,800 per 10 gram. MCX Silver December support lies at Rs 60,200 per kg, resistance at Rs 62,800 per kg.
Outlook: Crude Oil
Crude oil prices traded weak on Friday with benchmark NYMEX WTI crude oil prices down 0.17% near $72.44 per barrel in morning trade. Crude oil traded marginally down as operations at Gulf of Mexico are resuming, bringing more supply online post the hurricane effect. As of Thursday, about 28% of US Gulf of Mexico crude production remained offline. A stronger dollar has capped upside in oil prices with broad selling in commodity segment. We expect crude oil prices to trade sideways to up for the day.
Trading Strategy: MCX Crude Oil September support lies at Rs 5,260 per barrel with resistance at Rs 5,390 per barrel.
Outlook: Base Metals
Base metals traded mixed on Friday with copper and zinc trading positive while rest of the metals were trading with marginal losses. Base metals traded under pressure on stronger dollar and demand concerns from China. Aluminium prices may continue upside on strong fundamentals with supply concerns from China while copper may follow strong US data. Base metals may trade sideways to up for the day.
Trading Strategy: MCX Copper September support lies at Rs 720 and resistance at Rs 735. MCX Zinc September support lies at Rs 252 resistance at Rs 258. MCX Aluminium September support lies at Rs 226 with resistance at Rs 232.
(Tapan Patel is Senior Analyst, Commodities, HDFC Securities. Views are his own)