Crude oil is likely to hold its ground and move higher on supply risk and uncertainty over Russia-Ukraine peace talks - ICICI Direct
Bullion Outlook
* Spot Gold is likely to hold firm and move higher towards $3450 per ounce mark on growing probability of 50 bps rate cut in this year. Further, geopolitical uncertainty and delay in Russia-Ukraine peace talks would fuel the safe haven buying. In addition to this, US political uncertainty and concerns over Fed independence would provide support to the yellow metal. Meanwhile, focus will remain on Fed’s preferred gauge of inflation measure i.e., core PCE price index data. A higher number would lower the rate cut prospects and restrict upside in the bullions.
* Spot Gold is expected to hold support at $3380 and move higher towards $3450. Only a sustained move above $3450 would open the doors towards $3480. MCX Gold October is expected to rise towards Rs.102,400. A move above Rs.102,400 level, would open the doors towards Rs.103,000. Support holds near Rs.101,200.
* MCX Silver Dec is expected to rise towards Rs.119,400 as long as it holds above Rs.116,000 level. Only a move below Rs.116,000 it would turn weaker
Base Metal Outlook
* Copper prices are expected to hold its ground and rebound on soft dollar. Further, growing probability of loose monetary policy from the US Federal Reserve would also support the base metals to regain its strength. Meanwhile, tariff concerns and rising inventory levels would likely restrict any major up move in the metal prices. Moreover, mixed batch of economic numbers from China may limit its upside. Investors will keep an eye on manufacturing activity numbers for more clarity
* MCX Copper September is expected to hold its ground and move higher towards Rs.895, as long as it trades above Rs.883level. Only below Rs.883, it would turn weaker towards Rs.878.
* MCX Aluminum September is expected to move in the band of Rs.251 and Rs.255 level. Only below Rs.251 it would turn weaker towards Rs.248. MCX Zinc September is likely to hold the support at Rs.265 and rebound towards Rs.269 level.
Energy Outlook
* Crude oil is likely to hold its ground and move higher on supply risk and uncertainty over Russia-Ukraine peace talks. Recent attacks on Russian refineries and no progress in the peace negotiation will cause disruption to Russian crude exports. Moreover, secondary restrictions could also hurt global supplies. US has threatened to impose additional tariffs on Russia’s trading partners or fresh sanction on Russia could be imposed if no progress is made towards a peace deal. Meanwhile, investors will eye on key US inflation numbers for further clarity on interest rate decision.
* On the data front, 60 put strike has higher OI concentration which would act as key support. On the upside 65 call strike, has higher OI concentration, which would likely to act as immediate hurdle. Above $65 it would rise towards $66.50. MCX Crude oil September is likely to hold the support at Rs.5480 and rise towards Rs.5720 level.
* MCX Natural gas September future is likely to rise towards Rs.270, as long as it trades above Rs.255.
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