Commodity strategies: Gold, silver, crude, base metals
02 Sep 2021
Here is a look at how different commodities are behaving in today’s market.
Bullion prices traded steady on Thursday with spot gold prices at COMEX flat near $1,812 per ounce. Spot silver prices at COMEX were also trading flat near $24.11 per ounce in morning trade. The precious metals hovered in upper trading range on mixed global cues. Gold prices eased from previous highs awaiting US job market report on Friday, while silver prices rallied in the previous session on bargain buying despite weak base metals. The dollar index was trading marginally up, limiting gains in bullion prices. We expect bullion prices to trade sideways to up for the day.
Gold October resistance for the day lies at Rs 47,400 per 10 gram with support at Rs 46,800 per 10 gram. MCX Silver December support lies at Rs 62,500 per kg, resistance at Rs 65,000 per kg.
Outlook: Crude Oil
Crude oil prices traded lower on Thursday with benchmark NYMEX WTI crude 0.38% down near $68.33 per barrel in morning trade. Crude oil prices witnessed selling after OPEC plus nations stuck to their strategy to gradually increase supply despite rising Covid worries. The OPEC plus agreed on Wednesday to continue a policy of phasing out record production reductions by adding 400,000 bpd each month to the market. The EIA report showed crude oil inventories fell by 7.2 mb last week. We expect crude oil prices to trade sideways to up for the day.
Trading Strategy: MCX Crude Oil September support lies at Rs 4,940 per barrel with resistance at Rs 5,080 per barrel.
Outlook: Base Metals
Base metals traded firm with a positive opening in most of the metals. Aluminium prices traded with around 1% gain on lower supply concerns amid China’s crackdown on polluting smelters. Base metals got support from a weaker dollar which is hovering near one-month lows. The strong equity indices may boost some buying in base metals with signs of improved industrial demand. Base metals may trade sideways to up for the day.
Trading Strategy: MCX Copper September support lies at Rs 705 and resistance at Rs 715. MCX Zinc September support lies at Rs 242, resistance at Rs 248. MCX Aluminium September support lies at Rs 211 with resistance at Rs 216.
(Tapan Patel is Senior Analyst, Commodities, HDFC Securities. Views are his own)