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Metal’s Outlook

Bullion Outlook

• Spot gold is likely to face stiff resistance near $2030 and weaken further towards $2000 on diminishing prospects of early cut to interest rates by the Fed. Strong US dollar and higher US treasury yields would check the upside in the bullions. However, sharp fall in prices may be cushioned as demand for safe haven may rise on ongoing tension in the Middle east. Meanwhile, focus will shift towards this week’s key FOMC meeting minutes.

• MCX Gold April price is expected to face the resistance at 62,200 and weaken further towards the immediate support at 61,600. Only close below 61,600 it would turn weaker and slide towards 61200.

• MCX Silver is expected to face the hurdle near 72,200 and move lower towards 70,800. Only a sustained move below 70,800, would weaken further towards 70,400.

Base Metal Outlook

• Copper prices are expected to find support and move north amid tightness in the physical market. Further, 25 bps cut in 5 year loan prime rate by PBOC would brighten hopes of more stimulus measure from China to support economic growth. Moreover, depleting stocks at LME registered warehouses and hopes of fresh demand from China after New year holiday would support the metals to hold its ground. Meanwhile, strong dollar could restrict the upside in the red metal.

• MCX Copper is expected to hold the 20 day EMA at 718 and rise towards 726. Only a sustained move above 726 would push the price towards 730.

• Aluminum is expected to find support near 196 and trim its earlier losses. On the upside 199 would act as immediate resistance.

Energy Outlook

• NYMEX Crude oil is likely to hold its gains amid increasing supply concerns due to unrest in the Mideast. Recent attacks on the Red sea has ignited the tensions again, which might push the oil prices to the key resistance zone at $79-$80. Meanwhile, uncertain demand outlook in the coming year amid higher interest rate outlook would limit the NYMEX crude to go beyond the $80 mark. Further, higher crude oil production from US would also limit its upside.

• MCX Crude oil March is likely to move in the range of 6400 and 6550. Only a move above 6550 it would open the doors towards 6640. On the contrary, below 6400 it would again slide towards 6250.

• MCX Natural gas is expected to remain under pressure and move towards 125, as long as it trades under 136. Higher US production and forecast of mild winter in US would check upside in gas prices.

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