Base Metals Prices Are Likely To Trade With Positive Bias Today - HDFC Securities
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GLOBAL MARKET ROUND UP
Gold is headed for a weekly loss after a hot inflation reading signalled more aggressive interest rate hikes by the Federal Reserve. Gold pared early declines after hotter-than-expected US inflation data set the stage for more aggressive interest-rate hikes by the Federal Reserve. Bullion has been pressured by a myriad of factors this week, including strong US economic data, and the Bank of England’s move to remove emergency support by Friday, which has lifted the dollar
Oil is headed for a weekly loss as signs of a global economic slowdown and tighter monetary policy threaten to sap energy consumption
After a highly volatile session, Base metals prices ended mixed on MCX where Aluminium and Copper ended in the green while Zinc ended mildly in the red. Base metals recovered more than 2% from the intraday low as the Equity market acrossthe globe rebounded sharply after opening lower.
A broad-based improvement in risk sentiment is spreading across markets early in Asia, amid softness in the dollar. Asian equities advanced in the wake of a shocking rebound in US stocks that roared back from losses sparked by a hot inflation reading.
Market bets on rates still lean toward back-to-back 75 basis-point hikes at the next two Fed meetings and expect the central bank to push rates past 4.85% before the tightening cycle ends.
Commodity Daily BULLION
Gold prices fell on Friday and were set to close the week lower amid fears of more interest rate hikes by the Federal Reserve. Bullion has been pressured by a myriad of factors this week, including strong US economic data, and the Bank of England’smove to remove emergency support by Friday, which haslifted the dollar.
Trading Strategy: After huge volatility, Gold ended up where it opened. MCX Gold December future has formed a long-legged “Doji” candlestick pattern on the daily chart. The implication of this pattern is bullish, as the previous trend was down. Yesterday’s low of 50400 in December fut. becomes the strong support for Gold and keeping that stop loss, traders can initiate longs for the target of 51650. Silver December fut. fell for the fifth consecutive session and reached crucial support of the upward-sloping trend line on the daily chart. It is advisable to go long with the stop loss of 56190 for the target of 59400.
Commodity Daily ENERGY
WTI traded near $89 a barrel, taking this week’s decline to almost 4%. Red-hot US inflation data released on Thursday spurred expectations that the US Federal Reserve will again hike interest rates substantially at its two remaining meetings of 2022,slowing growth.
NYMEX WTI Oil options traders are wagering that OPEC+ production cuts could send crude prices higher in the coming months. The volume of bullish options bets on West Texas Intermediate jumped to the highest since 2019 this week.
Trading Strategy: MCX crude oil Oct. fut. is expected to march towards 7720, the recent swing high while holding the support line around 7080. MCX Natural Gas is set for reversal amid positive divergence. It has support at 526 and resistance at 578.
Commodity Daily BASE METALS
After a highly volatile session, Base metals prices ended mixed on MCX where Aluminium and Copper ended in the green while Zinc ended mildly in the red. Base metals recovered more than 2% from the intraday low as the Equity market across the globe rebounded sharply after opening lower. Metals Prices were also boosted by signs that sanctions against Russia were beginning to cause a supply crunch, which is likely to boost the red metal in the coming days. Chile’s Codelco, the world’s largest copper miner, is reportedly selling copper to European buyers at a record-high premium, citing tightening supply conditions
Trading Strategy: Base metals prices are likely to trade with positive bias today. MCX Copper Octsupport lies at Rs. 652 and resistance at Rs. 661 and 670. MCX Zinc Oct support lies at Rs. 268, resistance at Rs. 276. MCX Aluminium Octsupportlies at Rs. 204 with resistance at Rs. 213.
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