Copper prices are expected to trade with negative bias amid strong dollar and risk aversion in the global markets - ICICI Direct
Metal’s Outlook
Bullion Outlook
• Spot Gold is likely to slip further towards $4480 level on firm dollar and rise in US treasury yields. Additionally, bullions may slip as escalating tension in Middle East will further drive energy prices higher and amplify inflation concerns. Investors are worried that rising prices may prompt major central banks to keep interest rates elevated for longer. Market also fears that heightened tension in Middle East raised uncertainty over durability of ceasefire. Furthermore, investors will remain cautious ahead of slew of economic data from US to gauge economic health of the country and speeches from Fed officials to get clarity on interest rate trajectory
• MCX Gold June is expected to face stiff resistance near Rs150,700 level and slip towards Rs148,000-Rs147,000 level.
• MCX Silver July is expected to slip towards Rs238,000-Rs236,800 level as long as it stays below Rs251,000 level
Base Metal Outlook
• Copper prices are expected to trade with negative bias amid strong dollar and risk aversion in the global markets. Market sentiments are hurt as Iran intensified its military campaigned by hitting several ships in Strait of Hormuz and setting oil port at Fujairah ablaze. Additionally, investors fear that renewed trade conflict between US and Europe will hurt global economic growth and dent demand for industrial metal. Furthermore, copper may face headwinds from inflation concerns as it may prompt tighter monetary policy in major economies, alongside growth risk that may hurt demand for industrial metal
• MCX Copper May is expected to slip towards Rs1265 level as long as it stays below Rs1295 level. A break below Rs1265 level prices may be pushed towards Rs1260-Rs1255 level
• MCX Aluminum May is expected to rise towards Rs373-Rs375 level as long as its stays above Rs367 level. MCX Zinc May is likely to face stiff resistance near Rs346 level and slip towards Rs338 level
Energy Outlook
• NYMEX Crude oil is likely to trade with positive bias on growing concerns over fresh supply disruption after Iran intensified its military campaigned by hitting several ships in Strait of Hormuz and setting UAE oil port ablaze. May be US flagged merchant vessels exited the Gulf via strait accompanied by US military but escalating tension between US and Iran may discourage maritime operators from attempting to transit Strait of Hormuz. US President Trump attempt to use U.S. Navy to free up shipping is the war's biggest escalation since a ceasefire was declared 4-weeks ago. Market fears that heightened tension in Middle East raised uncertainty over durability of ceasefire
• MCX Crude oil May is likely to rise towards Rs10370-Rs10570 level as long as it stays above Rs 9700 level.
• MCX Natural gas May is expected to rise towards Rs 280-Rs 285 level as long as it stays above Rs 264 level.
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