Tuesday, November 30, 2021
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Commodity strategies: Gold, silver, crude, base metals

Ravindra Rao

Gold futures has breached the immediate support at Rs 45,760 and moved towards the Aug month lows near Rs 45,660. Gold is currently holding onto the support zone near Rs 45,700-45,600. Meanwhile, a sign of positive divergence between RSI and price might support the price at lower level. However, if price breaks down below Rs 45,700-45,600 on closing, then the downside would extend towards Rs 45,300. On the other hand, if price holds the support then it could rise towards the immediate resistance at Rs 46,220, followed by higher end of the consolidation range near Rs 46,600. To conclude, price is expected to consolidate in a wide range of Rs 45,600-46,220 with a sideways bias. A break on either side of the range would give a clear direction to the trend.

Trading Range: Rs 45,600-46,220

MCX Silver futures have fallen a bit during the trading session on Tuesday, but witnessed a quick rebound from the multiple support zone near Rs 59,200. The consolidation range of Rs 59,200-61,750 in silver is intact. Price has to move above Rs 61,675 to bring fresh buying interest which might push the price towards the next target/resistance at Rs 62,500. Meanwhile, price is hovering near the lower bound of the downward sloping channel, which also supports the limited downside in price. The short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. Meanwhile, RSI on the daily charts is hovering near 39, which suggests a bearish bias. However, positive divergence in RSI would support the bulls to take control. To conclude, price might consolidate in the band of Rs 59,200-61,675 with a sideways bias. Either side break of the range would bring more clarity in the trend.

Trading Range: Rs 59,200-61,675

(Ravindra Rao is CMT , EPAT, VP-Head Commodity Research, Kotak Securities Ltd. Views are his own)

Tapan Patel

Here is a look at how different commodities are behaving in today’s market.

Outlook: Bullion
Bullion prices traded steady on Wednesday with spot gold prices at COMEX up 0.28% up near $1,738 per ounce while spot silver prices at COMEX flat near $22.44 per ounce in morning trade. The precious metals traded under pressure with dollar rallying to 10-month high while US bond yields rose to three-month high. The rally in US bond yields is the downside risk for bullion prices. The 10-year US Treasury yields rose to 1.53% on rate speculation. The US Fed has signalled stimulus unwinding by mid-2022 which has triggered selling in precious metals. Bullion prices may trade sideways to down for the day.

Trading Strategy: MCX Gold October resistance for the day lies at Rs 46,200 per 10 gram with support at Rs 45,700 per 10 gram. MCX Silver December support lies at Rs 59,000 per kg and resistance at Rs 61,800 per kg.

Outlook: Crude Oil
Crude oil prices traded lower on Wednesday as benchmark NYMEX WTI crude oil prices fell by 1.53% near $74.14 per barrel in morning trade. Crude oil prices pared gains with profit booking following broad selling in commodities. Crude oil prices declined after US API data showed a build of 4.127 million barrels for the week ending Sep. 24. A stronger dollar also pressured crude oil prices to trade weak. Crude oil prices may extend decline if EIA data comes in line with Tuesday’s API data. We expect crude oil prices to trade sideways to down for the day.

Trading Strategy: MCX Crude Oil October support lies at Rs 5,420 per barrel with resistance at Rs 5,580 per barrel.

Outlook: Base Metals
Base metals traded mixed with most of the metals under pressure as investors continued to assess the impact of China’s electricity shortage on the consumption and production of raw materials. The power curbs in China has led to lower demand for industrial metals with restricted operating activities. Aluminum prices capped downside on supply shortage despite power crisis. Base metals may trade sideways to down for the day.

Trading Strategy: MCX Copper October support lies at Rs 708 and resistance at Rs 722. MCX Zinc October support lies at Rs 256 and resistance at Rs 263. MCX Aluminium September support lies at Rs 229 with resistance at Rs 237.

(Tapan Patel – Senior Analyst, Commodities, HDFC Securities. Views are his own)

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