Commodity strategies: gold, silver, crude oil and base metals
On Thursday, commodity prices were poor, with most non-agricultural commodities trading lower for the day, while crude oil prices remained the exception, recovering in the evening session. With the drop in US treasury yields, gold prices remained stable, limiting the downside. The price of base metals has been falling due to rising virus fears. Here’s how different commodities are behaving in today’s market.
Bullion: Outlook
In the early trade on Friday, spot gold commodity prices at COMEX were trading near $802 per ounce, while spot silver commodity prices at COMEX were trading a little down at $25.85 per ounce. The precious metals recovered in the previous trading session as US government yields fell. The 10-year US Treasury yield dipped below 1.25 per cent for the first time since February.
Strategy for Trading:
Trading Strategy: For the day, the MCX Gold Aug resistance is Rs. 48000 per 10 grams, while the support is Rs. 47500 per 10 grams. Support for MCX Silver September is around Rs. 67200 per KG, while resistance is at Rs. 70200 per KG.
Outlook for Crude oil:
Crude oil prices were firm on Friday, with the benchmark NYMEX WTI crude oil price trading a little higher near $73 per barrel in early trading. Crude oil prices rose on the back of bullish weekly inventory data and rising demand expectations. According to the US Energy Information Administration, US gasoline demand increased to 10 megabytes per day in the week leading up to the July 4th holiday.
Strategy for Trading:
The support level for MCX Crude Oil in July is Rs. 5370 per barrel, while the resistance level is Rs. 5530 per barrel.
Outlook for Base Metals:
Base metals commodity prices rose on Friday, with the majority of metals trading at firm levels, with nickel prices climbing more than 1% for the day. Higher demand and fewer supply concerns helped base metals gain ground. China’s refined copper output decreased by 2.4 per cent in June compared to May. The distribution of Delta variant cases across the globe may be limited by base metals. Base metals may trade in a range of directions, from sideways to up.
Strategy for Trading:
The MCX Copper July support and resistance levels are Rs. 720 and Rs. 730, respectively. The MCX Zinc July support level is Rs. 238, while the resistance level is Rs. 243. The support level for MCX Nickel in July is Rs. 1360, while the resistance level is Rs. 1420.
After gaining the most this week, MCX GOLD futures have pulled back. Price almost rose to the previous downtrend’s 61.8 per cent Fibonacci retracement level (48430) but failed to close above the psychological barrier of 48000. However, it is still trading above the 47530 20-day EMA support.
For August futures, the next level of support is around 47350. The RSI, or relative strength index, has remained near 50, indicating a horizontal trend (46). So, with a sideways bias, pricing is projected to move in the area of 68400-70250 for the day. The weakness would only be extended to 67800 if it fell below 68400.
