Gold futures tried to rally on Thursday but gave back a significant amount of gain to test the key support at Rs 45,950. Bollinger band analysis on the daily charts suggest a weaker trend in price as it is moving inside the midline and lower Bollinger band. Now, the price has hit the lower Bollinger band support (-2 SD), which could provide immediate support and limit its downside. However, a move below would weaken towards the next key support at Rs 45,800, followed by Rs 45,630. On the other hand, if the price held the support at Rs 45,950 then it might rally towards the immediate resistance at Rs 46,550. On the oscillator front, RSI (At 39) is hovering below the neutral zone, indicating a weaker bias. So in the near term, the price is expected to move in a wide range of Rs 45,950-46,550 with a sideways to downward bias. Only a close below Rs 45,950 would bring fresh selling interest in gold and the price might slide towards Rs 45,800-45,630 zone.
Trading Strategy: Sell MCX Gold Oct at Rs 46,400. Target: Rs 45.950. Stop loss: Rs 46,600
MCX Silver futures moved in a sideways range on Thursday. The key resistance stood at Rs 61,500, which is the midline of the regression channel. A sustained move above Rs 61,500 might bring fresh buying interest and that would push the price towards the next target resistance at Rs 62,500. On the downside, Rs 59,200 holds key support for Silver Dec futures. The downward sloping channel in silver is in place with support near Rs 60,200 and Rs 59,200. Meanwhile, RSI on the daily charts is hovering near 38, which suggests a bearish bias. So for the day, the price might consolidate in the band of Rs 59,200-61,500 with a sideways to lower bias. Either side breakout of the range would bring more clarity in the trend.
Trading Range: Rs 59,200-61,500
(Ravindra Rao is CMT, EPAT, VP-Head Commodity Research, Kotak Securities Ltd. Views are his own)
Here is a look at how different commodities are behaving in today’s market.
Bullion prices traded firm on Friday with spot gold prices at COMEX up half a percent near $1,751 per ounce while spot silver prices up 0.72% up near $22.65 per ounce in morning trade. The precious metals pared some of previous loses with gold recovering after falling below $1750 per ounce on Thursday. Bullion prices decline after US Fed unveiled to wind up pandemic related stimulus by mid-2022 and will hike rates by end of 2022. The US 10-year bond yields pressured precious metals and rose to 1.40% to the highest since July 2021. Bullion prices may trade sideways to down for the day.
Trading Strategy: MCX Gold October resistance for the day lies at Rs 46,300 per 10 gram with support at Rs 45,800 per 10 gram. MCX Silver December support lies at Rs 59,000 per kg, resistance at Rs 61,800 per kg.
Outlook: Crude Oil
Crude oil prices traded firm on Friday with benchmark NYMEX WTI crude oil prices up 0.04% near $73.33 per barrel in morning trade. Crude oil prices traded higher for the fourth consecutive day on tighter supplies ahead of higher demand forecast. The OPEC plus nations are struggling to meet raised output quota due to maintenance work. China’s auction of crude oil from state reserves will have little impact comparing the size of the country’s oil consumption. We expect crude oil prices to trade up for the day.
Trading Strategy: MCX Crude Oil October support lies at Rs 5,340 per barrel with resistance at Rs 5,480 per barrel.
Outlook: Base Metals
Base metals prices traded mixed on Friday. Most of the metals kept firm trading range in morning trade. Base metals capped upside on weak Asian cues on persistent uncertainty around the fate of debt-ridden China Evergrande. Investors continue to worry about the fate of property developer China Evergrande which faces an interest payment deadline due Thursday. Its shares fell 5.2% on Friday after bouncing 17.6% a day earlier. Aluminium prices extended gains on strong demand and lower supply. The pollution curbs action by China has impacted aluminium supplies from smelters which has led prices to 2008 highs. Base metals may trade sideways to up for the day.
Trading Strategy: MCX Copper September support lies at Rs 708 and resistance at Rs 720. MCX Zinc September support lies at Rs 254 resistance at Rs 262. MCX Aluminium September support lies at Rs 229 with resistance at Rs 236.
(Tapan Patel is Senior Analyst, Commodities, HDFC Securities. Views are his own)