Wednesday, October 20, 2021
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Commodity strategies: Gold, silver, crude, base metals


Ravindra Rao


Gold Dec futures closed on a higher note on Wednesday after trading lower early in the session. The yellow metal hit the higher band of the downward sloping trend line resistance near Rs 47,000, which could be the key reversal point in the coming sessions. Therefore, a trade through Rs 47,000 will change the main trend to positive and push the price towards the next resistance at Rs 47,360 (200-DEMA). On the lower end, the immediate support is at Rs 46,575 (20-DEMA), followed by Rs 46,200. A reversal in the oscillator has strengthened the rebound in price as RSI has moved above the neutral zone (at 56). Moreover, the medium-term momentum has turned positive as the MACD index generated a crossover buy signal. Hence, for the day the price is likely to consolidate in the range of Rs 46,550-47,000 with sideways to positive bias. Further, a close above Rs 47,000 would attract fresh buying and push the price towards Rs 47,360.

Trading Strategy: Buy MCX Gold Dec at Rs 46,700. Target price: Rs 47,050. Stop Loss: Rs 46,500.

MCX Silver futures closed higher after declining towards the immediate supports of 5-day EMA at Rs 60,100 on Wednesday. Now the price is hovering near its key resistance of 20-day EMA at Rs 61,200. The next key resistance for price exists around Rs 61,670. The price has to move above Rs 61,670 to reverse the bearish trend. In broader terms, the trend in silver is still on the bearish side as price is trading inside a downward sloping trend channel with higher bound resistance near Rs 63,300 and lower bound support near Rs 58,200. On the oscillator front, RSI has reversed its earlier losses and moved towards the neutral zone at 50 (48), supporting the recovery. However, it has to sustain above the 50 mark to bring firmness in the momentum. Hence, the price has to move above the resistance of Rs 61,670 to register a reversal. Until then, it might consolidate in a broad range of Rs 61,670-59,000 with a sideways bias.

Trading Range: Rs 59,000-61,670

(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 Thursday with spot gold prices at COMEX down near $1,759 per ounce while spot silver prices at COMEX were marginally down near $22.55 per ounce in morning trade. Bullion prices witnessed recovery in the previous trading session with a fall in US bond yields despite firm dollar. The US 10-year treasury yields were trading near 1.54 per cent for the day, supporting bullion prices. Bullion prices may limit gains on supportive US private payroll data. Bullion prices may trade sideways to up for the day.

Trading Strategy: MCX Gold December resistance for the day lies at Rs 46,600 per 10 gram with support at Rs 47,100 per 10 gram. MCX Silver December support lies at Rs 59,500 per kg, resistance at Rs 62,500 per kg.

Outlook: Crude Oil

Crude oil prices traded lower on Thursday with benchmark NYMEX WTI down 0.88 per cent to $76.75 per barrel in morning trade. Crude oil prices halted rally reversed from its 3-year high on surprise inventory build-up. The US EIA report showed that weekly inventories rose by 2.3 mb last week. We expect crude oil prices to trade sideways to down for the day.

Trading Strategy: MCX Crude Oil October support lies at Rs 5,680 per barrel with resistance at Rs 5,840 per barrel.

Outlook: Base Metals

Base metals prices traded firm on Thursday. Most of the metals were trading higher on positive global cues. Base metals got support from positive US private payroll data which may reflect in Friday’s official non-farm payroll. However, base metals may limit upside on higher inflation concerns and lower demand from China over power shortage. Aluminum prices are trading in an upper range on supportive fundamentals on lower output from China over government curbs. Base metals may trade sideways to up for the day.

Trading Strategy: MCX Copper October support lies at Rs 708 and resistance at Rs 716. MCX Zinc October support lies at Rs 252, resistance at Rs 260. MCX Aluminium September support lies at Rs 231 with resistance at Rs 235.



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