MCX silver prices may face resistance near 67100 - ICICI Direct
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Bullion Outlook
* Gold prices dropped on Tuesday amid modest gain in the US dollar index and surge in US treasury yields
* Further, consumer price index in the US rose by 6.0% YoY in February 2023 in line with market expectations. Inflation eased in February but remained stubbornly high, presenting a challenge for the Federal Reserve as it is trying to cool down the economy with higher rates at the same time it moves to stem financial instability
* Gold is likely to trade with a negative bias for the day amid higher US treasury yields. However, sharp downside may be cushioned as demand for gold may increase as a hedge against economic uncertainties. MCX gold is expected to break the key support level of 57,250 to continue its downward trend towards the level of 57,000
* MCX silver prices may face resistance near 67100 and drop back till 66,400
Base Metal Outlook
* Copper prices faltered on Tuesday amid worries about the knock-on impact of a US banking crisis and modest gain in dollar
* Further, copper prices were pressurised on slow recovery of demand in top metals consumer China
* Meanwhile, sharp downside was cushioned on a drop in copper inventories at LME registered warehouses
* Copper is expected to trade with a positive bias for the day as the Fed may prioritise on financial market stability and refrain from raising interest rates in upcoming meeting. Additionally, some signs of cooling have emerged as retail spending is expected to decline in February supporting our view of pause in rate hike. MCX copper is likely to hold the key support level of 753 and rally back till 763 levels
Energy Outlook
• Crude oil prices tumbled to a three-month low on Tuesday after a US inflation report and the recent US bank failures sparked fears of a fresh financial crisis that could reduce future oil demand • Meanwhile, further downside was prevented after Opec further raised its forecast for Chinese oil demand growth in 2023 due to the relaxation of the country's Covid-19 curbs • Crude oil is expected to trade with a negative bias for the day as worries about the health of broader financial system continued to swing over the market. MCX crude oil is likely to trade with a downward trend towards the level of 5870 • MCX Natural gas prices rose more than 1% and are expected to trade towards the level of 220
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