MCX Natural gas price are expected to rally further - ICICI Direct
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Bullion Outlook
• Comex gold prices rebounded 0.60% on Wednesday amid a risk aversion in US markets and on decline in US 10 year bond yields
• On annual basis, CPI climbed 8.3% higher than 8.1% estimate but below 8.5% the prior month
• Moreover, rising geopolitical tensions between European Union and Russia over the Ukraine issue boosted demand for precious metal
• MCX gold prices are expected to trade with a positive bias due to pessimistic market sentiments in the global markets and elevated inflation. It is holding support at 100 day moving average, which is around | 50,300. As long as it sustains above this level, it is likely to rally towards | 51,200 levels for the day. Additionally, investors will keep an eye on initial jobless claims data from the US
Base Metal Outlook
• LME Copper prices surged around 0.75% on Wednesday as slowing Covid-19 infections in top metals consumer China eased near term industrial metal demand concerns
• China's factory-gate inflation eased to a one-year low in April, giving policymakers headroom for more stimulus to shore up a flagging economy.
• However, a sharp rise in US dollar index along with significant increase in LME copper stockpiles limited further gains in copper prices
• MCX copper prices are expected to consolidate in the range of | 742 to | 768 for the day. Going ahead, the next leg of the move should resume only once it manages to come out of this range.
Energy Outlook
• WTI crude oil prices advanced almost 6.0% on Wednesday due to higher fuel demand from the US and as investors feared about tighter supply amid Russia-EU energy quarrel intensified
• According to EIA data showed on Wednesday, US commercial Crude inventories surged to 424 million barrels from 416 million barrels over the past one week
• US natural gas futures surged more than 3.0% on Wednesday after Ukraine suspended a major transit route of Russian gas flows to Europe via Ukraine. The transit point Ukraine shut usually handles about 8% of gas supply to Europe
• MCX Natural gas price are expected to rally further towards | 620 for the day due to concerns over lower gas flow from Russia to European countries. Additionally, market participants will remain cautious ahead of natural gas storage data from the US
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