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

Ravindra Rao

Gold Dec futures witnessed a good rebound after testing Wednesday’s lows at Rs 45,700. Price has moved above the 8- and 20-day EMA resistance at Rs 46,180 and Rs 46,480, respectively, suggesting a phase of recovery in the trend. Meanwhile, the key resistance for price exists around Rs 46,800. The price has to breach the previous top to extend its rebound towards Rs 47,100. The broad trend is downward as price is still hovering in the downward sloping trend channel. The medium-term momentum has turned negative as the MACD index has generated a crossover signal. However, positive divergence in RSI could limit the downside in gold prices. To conclude, price is expected to consolidate in the wide range of Rs 45,700-Rs 46,800 with a sideways bias.

Trading Range: Rs 45,700-46800

MCX Silver futures followed the path of yellow metal and witnessed a sharp rebound towards the 8-day EMA at Rs 60,100. Price hit the lower band of the regression channel support at Rs 58,100 and moved higher, suggesting a phase of recovery in the trend. The rebound of RSI from the oversold zone has supported the recovery. The formation of a bearish continuation pattern (Bearish Pennant) is still in place, which could restrict the recovery process. Now, the price has to move above the key resistance of Rs 61,670 to reverse the bear trend in silver. Till then, it might consolidate in a broad range of Rs 60,500-58,200 with a sideways to weaker bias. Hence, any rise towards the resistance zone would attract selling.

Trading Range: Rs 60,500-58,200

(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 Friday with spot gold prices at COMEX flat near $1,752 per ounce while spot silver prices at COMEX half a percent down near $22.03 per ounce in the morning trade. The precious metals witnessed a strong rebound on Thursday on inflation worries despite firm US bond yields. The rising oil prices along with power shortage may result in higher input costs hurting economic recovery. Bullion prices may trade sideways to up for the day.

Trading Strategy: MCX Gold December resistance for the day lies at Rs 46,700 per 10 gram with support at Rs 46,200 per 10 gram. MCX Silver December support lies at Rs 58,000 per kg and resistance at Rs 61,000 per kg.

Outlook: Crude Oil
Crude oil prices traded weak on Friday with benchmark NYMEX WTI crude oil prices down 0.23% near $74.86 per barrel in morning trade. Crude oil prices pared some of the previous gains on expectations that the OPEC+ supplier alliance might step up a planned increase in output to ease supply concerns. The rising prices of coal and natural gas due to lower supply has increased demand for crude oil. OPEC plus nations are scheduled to meet on Monday where producers will discuss whether to go beyond their existing deal to boost production by 400,000 barrels per day (bpd) in November and December. We expect crude oil prices to trade sideways to up for the day.

Trading Strategy: MCX Crude Oil October support lies at Rs 5,480 per barrel with resistance at Rs 5,620 per barrel.

Outlook: Base Metals
Base metals prices traded lower with downside in most of the metals as China goes for week-long national holiday and lower demand due to power crisis. China is facing shortage of coal, the key supply to produce electricity which has led to severe restrictions for manufacturers. Power curbs in China has led to lower demand for industrial metals with restricted operating activities. A stronger dollar may also cap upside in base metals for the day. Base metals may trade down for the day.

Trading Strategy: MCX Copper October support lies at Rs 687 and resistance at Rs 798. MCX Zinc October support lies at Rs 247, resistance at Rs 254. MCX Aluminium September support lies at Rs 224 with resistance at Rs 229.

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

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