Copper prices are likely to remain under pressure amid growth concerns in China - ICICI Direct
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Bullion Outlook
Metal’s Outlook
* Spot gold is expected to hold the support at $2390 and move towards the $2425 mark amid increasing probability of early rate cut by the Federal Reserve in September. Moderation in the inflation numbers and crack in the labor market would force the Fed to take primitive steps to prevent a further economic downturn. Meanwhile, profit booking ahead of the Fed chair’s speech can’t be ruled out. Next key hurdle exists near $2425 and $2450, maximum OI concentration exits at $2450.
* MCX Gold Aug is expected to hold the key support at 72,800 and move towards 73,700. Above 73700 it would open the doors towards 74,000.
* MCX Silver September is expected to hold the support near 92,000 and regain its strength towards 94,500. Only close below 92,000 it would turn weaker towards 90,800.
Base Metal Outlook
* Copper prices are likely to remain under pressure amid growth concerns in China. Weaker than expected economic numbers from China would hurt the demand outlook of the metal. Chinese GDP rose by 4.7% YoY in second quarter missing expectations of 5.1% growth. Further, persistence rise in inventory levels at LME would also weigh on the metal prices. Again fading hopes of fresh round of stimulus form China to support the economy would hurt the demand outlook.
* MCX Copper July is expected to face the hurdle near 875 and trade lower towards 858. Only above 875, it would confirm the reversal in trend and rise towards 880. .
* Aluminum is expected to face the hurdle near 231 and move lower towards 227.50.
Energy Outlook
* NYMEX Crude oil is expected to trade lower amid signs of progress in ceasefire talks between Israel and Hamas. Further, weakness in crude oil demand from China would also limit its upside. Additionally, dollar rose amid worries over political uncertainty in the US following an attack on US presidential candidate Donald Trump. For the day we expect prices to face the hurdle near $83.50 mark and weaken further towards the $81.00. Moreover, higher OI concentration near OTM calls at 85 and 84 strike call would act as good supply zone.
* MCX Crude oil July is likely to dip towards the 20 day EMA support at 6820. A move below 6820 would weaken further towards 6740. On the upside 7000 would act as key resistance.
* MCX Natural gas July is likely face the hurdle near 200 and move lower towards 188.
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