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GOLD

MCX Gold futures witnessed bullish movement during the June month so far amid reports of easing lockdown situation in the western countries that has boosted the inflation in retail sector. Falling Bond yields and US Dollar Index has given strength to the global gold prices. Simultaneously, gold prices have eased during last week due to upcoming developments in US regarding the FOMC Meeting; as global experts forecast hawkish stance by FED Chairman. By 15th June, MCX Gold futures closed at Rs.48424/10 grams, lower by 0.81% compared to Rs.48821/10 grams reported on 31st May.

Fundamentally for the coming month, we expect international Gold futures to trade bullish as lower prices is expected to increase buying; supported by bullion-backed exchange-traded funds signalling a boost to investor sentiment. Although, FOMC Meeting update in the near future could cap extreme bullishness in gold prices, but then, we expect the long term trend of gold buying to remain positive with forecasts of higher sales of American eagle coin sales and buffalo coin sales. Dollar Index on the longer duration to remain under pressure as the Asian countries begin to reopen adding strength to the gold prices as well. Based on world gold council, central banks of various countries continue to purchase high amount of yellow metal; with recent news of higher buying of gold by Hungary, Thailand, Poland, Turkey and Russia. However, the overall buying of the central banks continue to remain lower than the pre-covid-19 situation. Gold holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund has risen to 1,044.61 tonnes over the months and expected to rise in the coming months ahead. The ETF has a market value of $62.64 billion higher compared to last month as well.

On the daily chart, MCX Gold (Aug) future had given breakout of Falling Channel and again reclaim the upper band of the pattern, which indicates an immediate support & bullish set-up in the counter. In addition, the price has been finding support at 50 Exponential Moving Averages, which point out positive trend for the near future. Moreover, an oscillator Stochastic is also supportive for the long position with positive crossover. In addition, the price is trading above the Ichimoku Cloud, which confirms a bullish trend in the near future. Furthermore, In COMEX division gold has strong support at $1845. Hence, based on the above technical structure, one can initiate a long position in MCX Gold (Aug) future at CMP 48450 or a fall in the price till 48300 levels can be used as a buying opportunity for the upside target of 49300. However, the bullish view will be negated if MCX Gold (Aug) future closes below the support level of 47900.

GUAR SEED

NCDEX Guar Seed future price has been trading bearish in the month of June so far amid the sentimental decline in prices due to the ongoing monsoon season in India. So far, the south west monsoon has timely hit various parts of India that has pressurised prices in the agriculture sector. Although, the crude prices have been rising on a weekly basis, but then, guar seed prices remain subdued due to lower buying in the APMC Market of Jodhpur during the lockdown phase. By 15th June, NCDEX Guar seed price closed at Rs.4103/quintal, lower by 3.89% compared to Rs.4263/quintal reported on 31st May.

Fundamentally for the month ahead, we are estimating NCDEX Guar Seed futures to trade bullish as most of the cash market yards reopened after the easing of the COVID lockdown restriction. India’s April guar gum export figure once again remained positive, up by 3.38% to 20,808 tonnes compared to 20,107 tonnes during March 2021. We also expect the May-June export figures too to be higher compared to the same period last year. India’s guar split exports rose in the month of April 2021 by 66% to 5,560 tonnes compared to 3,334 tonnes during March 2021. The exports of guar gums seems to be gradually picking-up with gradual increase in the oilrig counts. There is considerably a good sign of gradual increase in oil rigs with surge in crude oil demand in recent months, which could increase the overseas guar gum demand. Furthermore, the Brent Crude Oil price has breached the $75 levels which is expected to support Guar prices in the longer duration. Recent reports by the traders regarding possible crop switch from Guar Seed to other Kharif crops such as Cotton, Soybean and Groundnutin the states of Haryana, Rajasthan and Gujarat respectively is expected to Support prices.

Ona weekly chart, NCDEX Guar seed (July) future has been trading in a Sideways Trend for the last few weeks. Although, the price is trading above Ichimoku Cloud, which point-out positive trend for long term. In addition, the price has been taking support at 50% Fibonacci Retracement level & 21 Exponential Moving Averages, which confirm good support in the near future. Moreover, a momentum indicator RSI (14) reading is above 50 levels, which suggests a bullish move for the near future. Hence, based on the above technical structure, one can initiate along position in NCDEX Guar Seed (July) future at CMP 4100 or a fall in the price till 4000 levels can be used as a buying opportunity for the upside target of 4410. However, the bullish view will be negated if MCX A Guar seed (Aug) future closes below the support level of 3900.

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