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Commodity strategies: Gold, silver, crude, base metals


Ravindra Rao


MCX Gold futures witnessed a sharp rebound from its support zone at Rs 46,700 following the US CPI report. Gold hit its target resistance of 50-DEMA (Rs 47,300) and closed above the 20-DEMA (Rs 47,140), suggesting a phase of recovery. It has to sustain above the 50-DEMA to extend a rebound towards its next key resistance at Rs 47,600. The key support for price holds around Rs 46,950, followed by Rs 46,620. A reversal in the momentum oscillator RSI (51) has strengthened the bull case. However, it is still hovering near the neutral zone (51), suggesting a sideways price trend. On the other hand, a rebound in fast stochastic from the oversold territory has negated bearish bets. So for the day, the price is expected to move in the range of Rs 46,950-47,600 with a sideways bias. Only a close above Rs 47,600 would extend the rebound towards the next key resistance at Rs 47,750.

Trading Range: Buy MCX Gold Oct at Rs 47,100. Target price: Rs 47,480. Stop loss: Rs 46,900

MCX Silver futures initially fell on Tuesday but reversed its losses and closed above the psychological level of Rs 63,000. Meanwhile, its 20-day EMA (Rs 64,000) is the key resistance for price. If the price manages to settle above this level, it will head towards the next resistance at Rs 65,500, followed by Rs 66,000. On the downside, the immediate support exists around Rs 62,400, which is the key level for the day. A move below would weaken the trend again and push the price towards Rs 61,800-61,200 zone. On the momentum front, RSI is hovering near 45, suggesting a sideways bias. So for the day, the price might consolidate in the band of Rs 62,400-64,000. Only a sustained move above Rs 64,000 would bring fresh buying interest in silver futures and push it towards Rs 65,500.

Trading Range: Rs 62,400-64,000

(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 Wednesday with spot gold prices at COMEX flat near $1,803 per ounce while spot silver prices at COMEX marginally down near $23.73 per ounce in morning trade. Precious metals traded firm with gold trading above $1,800 per ounce after US CPI data came in line with expectations. A stronger dollar may cap upside in gold prices despite of a breakout in consolidation range above $1,803 per ounce. Bullions prices may trade sideways to up for the day.

Trading Strategy: MCX Gold October resistance for the day lies at Rs 47,500 per 10 gram with support at Rs 46,900 per 10 gram. MCX Silver December support lies at Rs 62,000 per kg, resistance at Rs 64,500 per kg.

Outlook: Crude Oil
Crude oil prices traded higher on Wednesday with benchmark NYMEX WTI crude oil prices up 0.61% up near $70.89 per barrel in morning trade. Crude oil prices are trading higher above $70 per barrel with expectations of drawdown in weekly inventories. The US API data showed a draw of 5.437 million barrels for the week ending Sep. 10. Tropical storm Nicholas moved slowly through the region on Tuesday, cutting power to hundreds of thousands of homes and businesses. However, refineries in Texas continued to run normally. We expect crude oil prices to trade sideways to up for the day.

Trading Strategy: MCX Crude Oil September support lies at Rs 5,150 per barrel with resistance at Rs 5,310 per barrel.

Outlook: Base Metals
Base metals prices traded firm in morning trade with a positive opening in most of the metals on Wednesday. Base metals pared some of the previous loses after declining on profit booking. China’s retail sales grew a disappointing 2.5% in August from a year ago as the country dealt with the worst outbreak of Covid-19 since its initial spread in early 2020. Industrial production growth was also slightly below expectations, up 5.3% in August versus predictions of 5.8% growth. Base metals may trade sideways to up for the day.

Trading Strategy: MCX Copper September support lies at Rs 718 and resistance at Rs 732. MCX Zinc September support lies at Rs 250, resistance at Rs 256. MCX Aluminium September support lies at Rs 224 with resistance at Rs 230.

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



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