Copper may trade positive on strong China data and tight supply - ICICI Direct
Bullion Outlook
* Spot Gold is likely to rise further towards $3560 level buoyed by U.S. Federal Reserve rate cut bets. Further, demand for safe haven may increase on escalating geopolitical tension and concerns over soaring global fiscal deficits. Furthermore, political uncertainty in France and concerns about independence of U.S Federal Reserve will be supportive for the prices. Moreover, U.S congress has less than a month to pass legislation to keep federal agencies funded and avert partial shutdown. Meanwhile, all eyes will be on slew of economic data from U.S to get more clarity on rate trajectory. If job data signals slowdown in labor market it would reignite expectation of more than 2 rate cut this year
* Spot Gold likely to rise towards $3560 level as long as it holds the support near $3500 level. MCX Gold Oct is expected to rise further towards Rs.106,000 level as long as it stays above Rs.105,000 level
* MCX Silver Dec is expected to face stiff resistance near Rs.125,500 level and slip back towards Rs.123,000 level.
Base Metal Outlook
* Copper prices are expected to trade with a positive bias as improved economic data from China and signs of tightening supply will continue to support prices. Further, prices may move north on signs of increasing demand from China. Yangshan copper premium a gauge of China's appetite for importing copper rose to $55 a ton up from $29 a ton in July. Additionally, expectation of monetary easing would prove positive for the industrial metals as lower borrowing cost tends to stimulate economic activity. Meanwhile, strong dollar and risk aversion in the global markets would cap sharp upside in prices
* MCX Copper Sep is expected to rise further towards Rs.912 level as long as it stays above Rs.900 level. Only a break below Rs.900 level prices may witness weakness and slip towards Rs.895 Level
* MCX Aluminum Sep is expected to rise towards Rs.256.50 level as long as it stays above Rs.254 level. MCX Zinc Sep is likely to move north towards Rs.277 level as long as it stays above Rs.272.50 level
Energy Outlook
* Crude oil is likely to trade with positive bias and rise towards $66.80 level on supply concerns after U.S imposed new sanctions on Iran. Further, prices may rally on mounting concerns over supply disruption as conflict between Russia and Ukraine intensified. Investors fear that U.S administration may implement more secondary sanctions on major Russian oil buyers. Additionally, all eyes will be on OPEC+ meeting scheduled on 7 th September to get any cues on further output hikes. We don’t see group making any further changes to production, it will wait for more data. Moreover, U.S crude stockpiles are expected to show drawdown along with fuels, supportive for the prices
* WTI crude oil is likely to rise towards $66.80 level as long as its trades above $64.50. MCX Crude oil Sep is likely to rise towards Rs.5900 level as long as it stays above Rs.5650 level.
* MCX Natural gas Sep is expected to rise towards Rs.272 level as long as it stays above Rs.252 level.
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