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

Ravindra Rao

Gold futures edged higher but settled well off the high on Friday. The price rallied towards the 200- DEMA (Rs 47,380) after breaching the trend line resistance at Rs 47,000 following a weaker than expected US job report but retreated later in the session as the 200-DEMA holds the key resistance. Similarly, 20-DEMA at Rs 46,600 is acting as a good support. The medium-term momentum has turned positive as the MACD index generated a crossover buy signal. The MACD histogram is in a positive territory within an upward sloping trajectory which supports the higher price trend. To conclude, price is expected to consolidate in the wide range of Rs 46,600-47,380 with a sideways to higher bias. Only a close above Rs 47,380 would bring renewed buying interest in the yellow metal and push it higher towards Rs 47,800. On the flip side, a failure to hold above Rs 46,600 would weaken the trend and price might test the next support around Rs 46,450-46,200.

Trading Range: Rs 46,600-47,380

MCX Silver prices witnessed a quick rebound after testing the lower band of the regression channel and hit the higher band near Rs 63,000. The trend in silver is still on the weaker side as the downward sloping channel is still intact. However, a bullish candlestick pattern near the support line along with positive divergence in RSI could reverse the bearish trend. The immediate resistance is at Rs 63,200 (50-DEMA). A close above Rs 63,200 might lead to a resumption in its recovery rally towards Rs 64,200. Support is at Rs 60,000 (midline of the regression channel) below which the bears may target Rs 58,200 (recent bottom). From the above, we expect the price to trade in the range of Rs 60,000-63,200 with a sideways to higher bias. A close above Rs 63,200 may intensify the bullish momentum towards Rs 64,200.

Trading Strategy: Buy MCX Silver Dec at Rs 61,200. Target: Rs 63,200. Stop loss: Rs 60,000

(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 Monday with spot gold prices at COMEX near $1,757 per ounce while spot silver prices at COMEX were marginally up near $22.71 per ounce in morning trade. Bullion prices held strong trading range post Friday’s disappointed US job market data. However, the upside was capped after the US 10-year treasury yields rose to 1.61% for the day. The precious metals may get support from inflation worries and US economic growth. Bullion prices may trade sideways to up for the day.

Trading Strategy: MCX Gold December resistance for the day lies at Rs 47,300 per 10 gram with support at Rs 46,800 per 10 gram. MCX Silver December support lies at Rs 60,200 per kg, resistance at Rs 62,500 per kg.

Outlook: Crude Oil

Crude oil prices traded higher on Monday with benchmark NYMEX WTI crude oil prices rising by 1.88% to $80.84 per barrel in morning trade. Crude oil prices rallied on substitute demand from gas and coal consumers over rising prices. The recent surge in natural gas and coal prices globally has increased the demand for crude oil. We expect crude oil prices to trade up for the day.

Trading Strategy: MCX Crude Oil October support lies at Rs 5,980 per barrel with resistance at Rs 6,150 per barrel.

Outlook: Base Metals

Base metals prices traded firm on Monday with positive trading in most of the metals in morning trade. Base metals regained momentum with return of Chinese markets after a week long holiday. However, a stronger dollar against Yuan has pressured some of the metals to trade weak. Base metals may limit upside on lower demand worries from power shortages in China which has led to production cuts from the energy-intensive smelting and fabricating industries. Base metals may trade sideways to down for the day.

Trading Strategy: MCX Copper October support lies at Rs 725 and resistance at Rs 734. MCX Zinc October support lies at Rs 263, resistance at Rs 270. MCX Aluminium September support lies at Rs 236 with resistance at Rs 242.

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

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