Commodity prices traded higher on Tuesday with most of the commodities in the non-agro segment witnessed buying supported by weaker dollar. Bullion prices traded volatile and managed to end in the green zone for the day. The dollar index ended lower than 90 with decline in US treasury yields. Here is a look at how different commodities are behaving in today’s market.
Bullion prices traded firm with spot gold prices at COMEX was trading near $1,860 per ounce while spot silver prices at COMEX was trading steady at $25.53 per ounce in the morning trade. Bullion prices traded higher on dollar decline with fall in US treasury yields. The 10 year US treasury yields eased from 10 months highs on Tuesday boosting buying in bullion prices. The revisited pandemic fears raised concerns over economic recovery which also supported bullion prices from lower levels. We expect bullion prices to trade sideways to up for the day.
MCX Gold February resistance for the day lies at Rs. 49,700 per 10 grams with support at Rs. 48,900 per 10 grams.
MCX Silver March support lies at Rs. 65,000 per KG, resistance at Rs. 67,500 per KG.
Outlook: Crude Oil
Crude oil prices traded higher on Wednesday with benchmark NYMEX WTI crude oil prices rallied by more than 1% to $53.78 per barrel in the morning trade. Crude oil prices gained on bullish inventory data from US API which showed that weekly oil stockpiles fell by 5.82 mb against expectations of 2.7 mb draw. Crude oil prices boosted by broad buying in commodities over weaker dollar on demand growth optimism. Crude oil prices are expected to trade sideways to up for the day.
MCX Crude Oil January support lies at Rs. 3,870 per barrel with resistance at Rs. 3,990 per barrel.
Outlook: Base Metals
Base metals traded higher for the second day with most of the metals trading in green on demand growth optimism. Nickel prices traded higher with over half a percent gains, followed by Copper and Lead. Base metals prices were supported by dollar decline on US stimulus hopes and fall in US bond yields. The strong growth numbers from China side-lined pandemic worries which boosted buying in base metals. Base metals are expected to trade sideways to up for the day.
MCX Copper January support lies at Rs. 609 and resistance at Rs. 616.
MCX Zinc January support lies at Rs. 217, resistance at Rs. 223.
MCX Nickel January support lies at Rs. 1,260 with resistance at Rs. 1,320.
(Tapan Patel is a Senior Analyst (Commodities) at HDFC Securities)
By Ravindra Rao
MCX Gold February continued to consolidate in the band of Rs 48,900-49,700 as it held the key support of Rs 48,600 after last week’s sharp decline. Meanwhile price is trading below the 5 day EMA (49,700) and 21 day EMA (50,010), which could be the key resistance zone for the day. On the downside, below Rs 48,900, the 48,600 mark holds key support followed by 200 day EMA support at Rs 48,450. On the momentum front RSI is trading below 50 (38) suggesting weakness. Price is expected to move in the band of Rs 48,900-49,700 with sideways bias.
Sell MCX Gold Feb at Rs 49,700 with a target of Rs 48,900 and a stop loss at Rs 50,050.
MCX Silver March witnessed rebound towards the initial resistance Rs 66,680 (5 day EMA) after last week’s sharp decline. Meanwhile key resistance for silver futures exists around Rs 67,050 (21 day EMA), followed by Rs 68,400 which could act as good supply zones. Earlier price has breached the bullish channel and retraced below 50% Fibonacci level (64,760) of the up move. Meanwhile price is trading below the 21 day EMA (67,050) along with weaker RSI suggesting weakness in the trend. On the downside key support is below Rs 64,760, the 63,140 mark (61.8% Fibonacci level) holds the key level for the day. For the day price is expected to move in the band of Rs 64,760-67,100 with a sideways bias.
Sell MCX Silver Mar at Rs 67,050 with a target of Rs 64,750 and a stop loss at Rs 68,400.
(Ravindra Rao is VP-Head Commodity Research at Kotak Securities)