Commodity strategies: Gold, silver, crude, base metals

0
35
Commodity strategies: Gold, silver, crude, base metals


By Tapan Patel

Commodity prices traded higher on Monday as most of the commodities in non-agro segment except crude oil ended higher for the day. Bullion prices extended gains on slump in dollar and real yields. The dollar index traded below 90 mark on Tuesday supporting commodities to trade firm. Here is a look at how different commodities are behaving in today’s market.

Outlook: Bullion

Bullion prices traded firm on Tuesday with spot gold prices at COMEX were trading near $1,940 per ounce while spot silver prices at COMEX traded near $27.26 per ounce extending Monday’s gains. Bullion prices surged on safe haven buying with decline in US equities on worries over economic growth with spike in virus cases. The lower US yields and weaker dollar also supported bullion prices expecting more stimulus announcements. We expect bullion prices to trade higher for the day.

Trading Strategy:

MCX Gold February resistance for the day lies at Rs. 51,800 per 10 grams with support at Rs. 51,100 per 10 grams.

MCX Silver March support lies at Rs. 69,200 per KG, resistance at Rs. 71,500 per KG.

Outlook: Crude Oil

Crude oil prices pared early gain of Monday fell below $48 per barrel with benchmark NYMEX WTI crude oil prices was trading at $47.58 per barrel on Tuesday. Crude oil prices witnessed selling after OPEC extended talks for the second day without any decision over output quota. The increased lockdown measures in UK and surge in virus cases also added pressure on oil prices. Crude oil prices are expected to trade sideways to down for the day on weaker equity indices.

Trading Strategy:

MCX Crude Oil January support lies at Rs. 3,420 per barrel with resistance at Rs. 3,560 per barrel.

Outlook: Base Metals

Base metals traded higher on Tuesday with most of the metals extended gains on demand recovery optimism with vaccine rollouts. The fall in dollar index boosted buying in Copper and Nickel prices. The stronger demand from China has supported base metals to extend gains in 2021 after surging 20% in 2020. Base metals are expected to trade sideways to up for the day on positive global cues.

Trading Strategy:

MCX Copper January support lies at Rs. 602 and resistance at Rs. 610.

MCX Zinc January support lies at Rs. 217, resistance at Rs. 223.

MCX Nickel January support lies at Rs. 1,250 with resistance at Rs. 1,310.

(Tapan Patel is a Senior Analyst (Commodities) at HDFC Securities)


By Ravindra Rao


MCX Gold February has breached the key resistance of Rs 51,200 with strong momentum (RSI at 77). Meanwhile price is moving inside the upward rising channel with lower bound support near Rs 50,600 and higher bound resistance near Rs 52,000. Immediate support for Feb future exists around Rs 51,000, followed by 50,600 (5 day EMA). As the trend is bullish, any dip towards the support zones could be considered as good buying opportunities for the targets of Rs 2,000.

Strategy:

Buy MCX Gold Feb at Rs 51,100 with a target of Rs 51,950 and a stop loss at Rs 50,740.

MCX Silver March future has moved out of the consolidation with the breakout of the symmetrical triangle and key resistance of Rs 69,800. Meanwhile price is trading inside the upward sloping channel with lower band support near Rs 68,500-68,000. Price got support from the bullish crossover of 5 and 21 day EMA (68,770 and 66,760) along with strong RSI. On the upside Rs 70,600 is the key resistance (100% Fibonacci extension). So price needs to move beyond to extend its gain further towards the next level at Rs 71,600.

Strategy:

Buy MCX Silver Mar at Rs 69,200 with a target of Rs 71,600 and a stop loss at Rs 68,400.

(Ravindra Rao, VP-Head Commodity Research, Kotak Securities)





Source link

LEAVE A REPLY

Please enter your comment!
Please enter your name here