Base metals prices traded higher on Wednesday with most of the metals witnessed recovery from from Tuesday - HDFC Securities
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GLOBAL MARKET ROUND UP
Commodity prices traded mixed with base metals ended higher on soft dollar while bullion and crude oil prices witnessed lower trading for the day. The dollar index fell by 0.16% to 91.76 for the day on Fed comments.
U.S. stocks finished higher Tuesday, building on Monday’s sharp rebound from last week’s losses, as Federal Reserve Chair Jerome Powell reiterated his view that higher inflation will be transitory as the economy slowly works its way out of the pandemic this year.
In prepared testimony released by the subcommittee late Monday, Powell said, “the Fed will do everything we can to support the economy for as long as it takes to complete the recovery.” Testifying before Congress, Powell vowed that the Fed will not raise rates out of fear of potential rising inflation, and instead will prioritize a "broad and inclusive" recovery of the job market.
BULLION
Bullion prices traded firm on Wednesday with spot gold prices at COMEX were trading up near $1781 per ounce while spot silver prices at COMEX were trading nearly 1% up at $25.96 per ounce in the morning trade. Bullion prices pare previous losses after FED Chairman Jerome Powell warned that the economic recovery requires more time before stimulus unwinding. He reaffirmed that tighter monetary policy is far away on higher inflation concerns. Gold prices are hovering in steady range with dollar fluctuations and mixed global cues.
We expect bullion prices to trade sideways to up for the day. MCX Gold Aug resistance for the day lies at Rs. 47300 per 10 grams with support at Rs. 46800 per 10 grams. MCX Silver July support lies at Rs. 66500 per KG, resistance at Rs. 69800 per KG.
ENERGY
Crude oil prices traded firm on Wednesday with benchmark NYMEX WTI crude oil prices were trading 0.51% up at $73.22 per barrel in the morning trade. Crude oil prices traded higher reversing previous losses on falling US stockpiles. The industry-funded American Petroleum Institute was said to report domestic crude inventories fell 7.2 million barrels last week. Crude oil prices witnessed selling on expectations that OPEC plus nation may consider output hike when they meet next week.
We expect crude oil prices to trade sideways to up for the day. MCX Crude Oil July support lies at Rs. 5380 per barrel with resistance at Rs. 5510 per barrel.
BASE METALS
Base metals prices traded higher on Wednesday with most of the metals witnessed recovery from from Tuesday. Base metals traded higher on weaker dollar and China announced to sell relatively small quantities in its first release of stockpiles. The first batch for release next month will include 20,000 tons of copper, 30,000 tons of zinc and 50,000 tons of aluminum. Copper prices rallied on tight supply of concentrated material.
Base metals are expected to trade up for the day. MCX Copper June support lies at Rs. 710 and resistance at Rs. 725. MCX Zinc June support lies at Rs. 230, resistance at Rs. 238. MCX Nickel June support lies at Rs. 1310 with resistance at Rs. 1360.
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