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

Ravindra Rao

Gold Dec futures remained in a sideways trend ahead of today’s non-farm payrolls report. The yellow metal is still hovering near its higher end of the downward sloping trend channel resistance at Rs 47,000. So a sustained move above that might indicate a change in the primary trend to positive and the price might move towards the next resistance at Rs 47,360 (200-DEMA). On the lower end, the immediate support is at Rs 46,580 (20-DEMA), followed by Rs 46,200. The 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 has 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 a sideways to positive bias. Further, a close above Rs 47,000 would attract fresh buying and push the price towards Rs 47,360, followed by Rs 47,600.

Trading Strategy: Buy MCX Gold Dec at Rs 46,700. Target price: Rs 47,050/47,300. Stop loss: Rs 46,500

MCX Silver futures closed above the key resistance at Rs 61,400 (20-DEMA) after a sharp decline during mid-session on Thursday. Price has breached the higher band of the broad consolidation range, suggesting a reversal in the bearish bias. Now the price has to move above Rs 61,900 to resume its rally towards the next key resistance level at Rs 62,800 and Rs 63,500. Meanwhile, the price has breached the midline of the regression channel, which has strengthened the bullish bets. On the oscillator front, RSI has reversed its earlier losses and moved above the neutral zone at 50 (52), supporting the recovery. However, it has to sustain above the 50 mark to bring firmness in the momentum. So for the day, the price is expected to remain in the range of Rs 60,500-61,900 with a sideways to higher bias. Only a sustained move above Rs 61,900 would bring renewed buying interest and push it towards Rs 63,500.

Trading Range: Rs 60,500-61,900

(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 marginally up near $1,757 per ounce while spot silver prices at COMEX down 0.60% near $22.45 per ounce in morning trade. Bullion prices witnessed choppy but range-bound trading on mixed global cues with recovery in US bond yields and strong equity indices. The US 10- year treasury yields were trading near 1.59% for the day, capping upside in precious metals. Traders and investors are awaiting for key US employment numbers in the evening session. 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 higher on Friday with benchmark NYMEX WTI up by 1.32% to $79.33 per barrel in morning trade. Crude oil prices resumed uptrend on lower supply concerns and higher demand due to costly gas and coal prices. Crude oil prices rallied after US Energy department rejected possibility of any plans “at this time” to tap the nation’s oil reserves. Oil futures at China jumped almost 10% on Friday as local markets resumed after a week-long national holiday. We expect crude oil prices to trade up for the day.

Trading Strategy: MCX Crude Oil October support lies at Rs 6,020 per barrel with resistance at Rs 5,870 per barrel.

Outlook: Base Metals

Base metals prices traded higher on Friday. Most of the metals extended gains on positive global cues. Nickel prices rallied the most as the electricity shortage in China led to production cuts from energy-intensive base metals smelting and fabricating industries. Base metals may trade sideways to up for the day.

Trading Strategy: MCX Copper October support lies at Rs 722 and resistance at Rs 732. MCX Zinc October support lies at Rs 259, resistance at Rs 267. MCX Aluminium September support lies at Rs 234 with resistance at Rs 240.

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

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