Copper prices are likely to remain in range bound amid mixed set of factors - ICICI Direct
Metal’s Outlook
Bullion Outlook
* Spot Gold is expected to hold the support near $3350 and move towards $3430 amid safe haven buying. Escalating geopolitical tension between Israel and Iran would support the bullions to hold its ground. Price may find support after Iran’s Supreme leader rejected trump’s call for unconditional surrender. All focus will remain on developments on Iran and US which could bring further volatility in price. Prices would also find support on hopes of 2 rate cuts by the US Federal reserve in this year.
* Spot gold is expected to remain volatile and move in the band of $3350 and $3430. Only a move below $3350 it would turn weaker. MCX Gold Aug is expected to move in the band of Rs.98,500 and Rs.100,500 level. A move below Rs.98,500 would bring correction in price towards Rs.97,500.
* MCX Silver July is expected to take a pause in its rally and move lower towards Rs.107,100 level as long as it trades under Rs.110,000 level. Cut down in US GDP forecast would hurt the industrial demand outlook of the metal.
Base Metal Outlook
* Copper prices are likely to remain in range bound amid mixed set of factors. Weaker set of economic numbers from US and China would hurt its demand prospects, where as depleting inventory levels and supply concerns would provide support to prices. Widening LME copper backwardation clearly indicates tightness in the market. Meanwhile, drop in Yangshan Copper premium to its lowest over a month indicates sluggish demand in China.
* MCX Copper June is expected to move in the band of Rs.875 and Rs.884 level. A move above Rs.884, would rise towards Rs.890 level
* MCX Aluminum June is expected to hold support near Rs.243 and extend its rebound towards Rs.248 level. MCX Zinc June is likely to face resistance near Rs.254 level and move in the range of Rs.250 and Rs.254 level. A move aboveRs.254, would open the doors towards Rs.257.
Energy Outlook
* Crude oil is likely to remain volatile and trade with positive bias amid escalating geopolitical tenson in the Middle East. Growing speculation that US could join Israel’s attack on Iran would hurt global oil supplies. Meanwhile, growing bets of 2 rate cuts by the US Federal Reserve in this year would provide some support to prices. However, weaker set of economic numbers and cut down in US GDP forecast may hurt its upside.
* On the data front , strong put base at $65 strike suggest good support. Furthermore, addition of fresh OI at $70 put strike indicates immediate support for price at $70. On the upside key hurdle is at $75 mark. MCX Crude oil July is likely to remain in the band of Rs.6050 and Rs.6450 level. Only above Rs.6450, it would rise towards Rs.6600.
* MCX Natural gas June is expected to move higher towards Rs.355 as long as it holds above Rs.335 mark. Forecast of hotter weather in US would increase cooling demand.
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