MCX crude oil Dec. fut is expected to open higher and could witness a short covering bounce with the higher side resistance at 6580 - HDFC Securities
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GLOBAL MARKET ROUND UP
* Commodity markets were subdued with US markets closed. There was no settlement on Thursday due to the Thanksgiving holiday in the US. Nevertheless, a weaker dollar and ongoing supply-side issues helped push the energy and metal markets higher.
* Gold rose for a third consecutive day on the back of a weaker USD. However, investors were also buoyed by the Federal Reserve’s latest meeting minutes, which showed support for a moderation of interest rate increases.
* Crude oil edged lower amid mounting evidence of weaker demand. China’s road traffic is drifting lower in recent weeks amid rising COVID-19 cases. This is likely to be a key drag on oil demand. Implied oil demand remains subdued at 13mb/d, 1mb/d lower than average demand. EU diplomats are locked in negotiations over how strict the mechanism should be. Poland rejected USD65/bbl, while shipping giant Greece said it doesn’t want it below USD70/bbl.
* Copper edged higher, with a weaker dollar helping spur investor appetite. However, the gains were limited after Chinese smelters were able to set higher fees for copper concentrates. The higher fees suggest mine supply is rising, particularly in relation to smelting capacity
Commodity Daily| BULLION
U.S. Gold prices entered backwardation today and were headed for mild gains this week as optimism over the prospect of smaller interest rate hikes by the U.S. Federal Reserve offset worsening economic indicators. Spot gold prices traded at higher levels than futures- a phenomenon known as backwardation- which indicates that near-term demand for the yellow metal may be increasing. A U.S. holiday on Thursday gave metal markets few cuesto trade on, with volumes also remaining muted. But positive cuesfrom the minutes of the Fed’s November meeting, released earlier this week, provided a tailwind for prices.
Trading Strategy: MCX Silver Dec Future has risen for the third consecutive session. Next resistance is seen at 63045 odd levels. Support is placed at 60850. MCX Gold Dec Fut rose for the second session and resumed its uptrend. Support has shifted up to 52068, while resistance for the same is seen at 53200. View on both Silver and Gold is bullish for the short term.
Commodity Daily| ENERGY
Oil headed for a third weekly loss as the European Union weighed a higher-than-expected price cap on Russian crude and slowdown concerns threatened the demand outlook. Brent was steady below $86 a barrel, putting the global benchmark on course for a drop of almost 3% this week. European diplomats remain locked in talks over how strict the cap should be, highlighting disagreements between member states. Negotiations could resume Friday but may also slip beyond that. In China, the world’s largest oil importer, daily Covid infections hit a record thisweek, prompting officialsto step up curbs.
Trading Strategy: MCX crude oil Dec. fut is expected to open higher and could witness a short covering bounce with the higher side resistance at 6580 and support at 6320. MCX Natural Gas Dec future is having resistance at 670 and support at 605.
Commodity Daily| BASE METALS
Industrial metal prices ended on a mixed note on Thursday with Copper gained marginally while Aluminium and Zinc ended with losses. A U.S. holiday on Thursday gave metal markets few cues to trade on, with volumes also remaining muted. The dollar weakens during this week as the minutes, released on Wednesday, showed that the Fed was becoming increasingly concerned over the impact of its recent monetary policy tightening on the economy and inflation. While weakness in the dollar supported prices of the red metal, concerns over China’s worst COVID-19 outbreak remain.
Trading Strategy: Technical set-up remains strong for the base metals. Immediate support for MCX Copper November is placed at Rs. 669 and resistance at Rs. 681 and 690. MCX Zinc Nov support lies at Rs. 254, resistance at Rs. 270. MCX AluminiumNov supportlies at Rs. 199 with resistance at Rs. 208 and 214.
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