Copper prices are expected to find support and trade higher on soft dollar - ICICI Direct
Metal’s Outlook
Bullion Outlook
• Spot Gold is expected to find support near $4300 and rise towards $4450 level as weaker than expected jobs data and subdued inflation prints has relieved near term pressure on US Federal Reserve to hike interest rates. Further, investors are pricing in about a 33% chance of a rate hike in September, compared to 55% in previous week. Additionally, prices will find support on soft dollar and safe-haven buying. Gold backed U.S ETFs saw 3 billion of inflows in July, snapping two straight months of outflows.
• MCX Gold October is expected to find support near Rs 152,500 and rise towards Rs 156,500 level.
• MCX Silver September is expected to move in a wide range between Rs 232,000 and Rs 240,000 level. Only a move above Rs 240,000, it would rise towards Rs 243,000 level.
Base Metal Outlook
• Copper prices are expected to find support and trade higher on soft dollar. Further, squeeze in London copper market intensified, as spot prices hit a five-year high over future contracts, driven by exchange inventories plunging towards critically low levels. Additionally, concerns over tightening supply continued to underpin prices amid expectations for constrained global mine output. LME stockpiles fell for a 42nd straight day on Friday, the longest run of declines since 2014. The drawdown reflects traders shipping metal to US ahead of possible tariffs on refined copper. Meanwhile, upside will be limited on weak demand from China.
• MCX Copper August is expected to find support near Rs 1365 level and rise towards Rs 1390 level. Only a move above Rs 1390 level, it will rise towards Rs 1395 level.
• MCX Aluminum August is expected to find support near Rs 344 level and rise towards Rs 350 amid supply concern. MCX Zinc August is likely to find support near Rs 395 level and rise towards Rs 405- Rs 406 level.
Energy Outlook
• NYMEX crude oil expected to find support near $80 level and rise towards $85 on lack of any agreement between U.S and Iran on reopening the Strait of Hormuz. Further, Treasury Secretary Bessent said intends to pressure Iran by applying economic measures against Iran that have never seen before. Additionally, prices will find support after Iran attacked two Abu Dhabi oil vessels transiting the Strait of Hormuz. Meanwhile, upside will be limited on rising crude oil inventory.
• On the data front, a strong put base at $80 strike would likely to act as key support for price. On the upside, higher call base at $85 would act as an immediate hurdle. MCX Crude oil September is expected to find support near Rs 7600 and rise towards Rs 8100 level.
• MCX Natural gas August is expected to face resistance near Rs 266 level and dip towards Rs 256 level.
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