Copper to stay firm on tight supply, China-US demand and softer dollar - ICICI Direct
Metal’s Outlook
Bullion Outlook
* Spot Gold is likely to hold support at $4300 per ounce and move higher towards $4370 per ounce on growing optimism over accommodative US monetary policy, persistent geopolitical risks and strong ETF inflows. Further, appointment of a dovish US Federal Reserve chair would also fuel the prospects of loose monetary policy from the Fed and support the bullions to make new highs. Prices would also get support ahead of 25 bps rate cut by the BOE, whereas ECB is likely to keep rates on hold. On the other hand, any optimism over peace deal between Russia and Ukraine could restrict its upside.
* MCX Gold Feb is expected to hold the floor near Rs.133,000 level and rise towards Rs.135,500 level. Only move below Rs.133,000, it would slip towards Rs.131,500.
* MCX Silver March hold strong support at Rs.202,000 level and move higher towards Rs.210,500. Above Rs.210,500 it would rise toward Rs.212,500.
Base Metal Outlook
* Copper prices are expected to hold its ground and move higher on tight supplies and strong import demand from China and US. Additionally, growing bets of fresh round of stimulus from China to counter slowdown in the property sector would also help the metal to hold firm. Moreover, a softer dollar and increasing prospects of lose monetary policy would again strengthen the bullish bias in the red metal. Meanwhile, investors will eye on central bank policies and other economic data from China to get further clarity.
* MCX Copper Dec is expected to hold support near Rs.1096 and move higher towards Rs.1120 level. Only break below Rs.1096 level it may fall towards Rs.1080-Rs.1075 level.
* MCX Aluminum Dec is expected to rise towards Rs.284 level as long as it stays above Rs.277 level. Only a move below Rs.277, it would slip towards Rs.270. MCX Zinc is hovering near below 20-day EMA at Rs.306.50. As long as it stays under Rs.306.50 it would remain under pressure and slide towards Rs.299 mark.
Energy Outlook
* Crude oil is expected to hold support near $55 per barrel and move towards $58 mark amid rising geopolitical tension in Venezuela. The US has ordered a full shutdown of maritime traffic involving sanctioned oil tankers operating to and from Venezuela, halting oil supplies. Furthermore, delay in Russia-Ukraine peace negotiation could help prices to hold firm. Meanwhile, investors will eye key economic numbers from China and US to get further clarity in price trend.
* On the data front, a strong put base at $55 would act as strong support. On the upside a strong call base at $60 would act as major hurdle. MCX Crude oil Jan is likely to consolidate in the band of Rs.5020 and Rs.5180 level. Only move above Rs.5180 it would rise towards Rs.5250
* MCX Natural gas Dec is expected to hold support at Rs.350 and move higher towards Rs.370 level.
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