Crude oil is likely to trade lower on easing geopolitical risk - ICICI Direct
Bullion Outlook
* Spot Gold is likely to move lower towards $3300 on easing geopolitical tensions. Hopes of ceasefire in Ukraine and end to the Russia-Ukraine war has increased after the meeting with President Zelensky, European and NATO leaders. After the meeting US President has called for a trilateral meeting with Putin and Zelensky. Investors will eye for further developments. Meanwhile, investors will remain cautious ahead of key FOMC meeting minutes and comments from other Fed members to get more clarity on interest rate cut prospects. Last week’s higher PPI numbers has lowered the chances of 25 bps rate cut in September.
* Spot Gold is expected to slip towards $3300, a s long as it trades under $3375. MCX Gold October is expected to weaken towards Rs.98,600 as long as it remains below Rs.100,450 level.
* MCX Silver Sep is expected to slide towards Rs.112,800 and as long as it trades under Rs.115,300 level. Only below Rs.112,800, it would turn weaker.
Base Metal Outlook
* Copper prices are expected to trade lower on sluggish demand growth in China. Further, weaker than expected economic numbers from US and China would likely to hurt risk sentiments. Further, additional tariffs on steel and aluminium products might weigh on metal prices. Moreover, any progress on peace deal between Russia and Ukraine would improve supplies from Russia and increase supplies of Aluminium.
* MCX Copper August is expected to move lower towards Rs.878, as long as it trades under Rs.890 level. A move below the 50-day EMA would weaken the trend towards Rs.875
* MCX Aluminum August is expected to trade lower on improving supply scenario. Price may slide towards Rs.248, as long as it trades under Rs.254 level. MCX Zinc August is likely to slip towards Rs.262 level as long as it stays below Rs.268 level.
Energy Outlook
* Crude oil is likely to trade lower on easing geopolitical risk. Growing prospects of Russia-Ukraine talks after yesterday’s meeting indicates another step towards peace deal between the two nations. Any further progress to end the war could lead to an end to sanctions on Russian energy exports and improve oil supplies from Russia. Further, Hamas has agreed to a 60-day ceasefire proposal with Israel which could ease tension in the Middle East. Meanwhile, forecast of higher output in the coming year by OPEC and EIA likely to weigh on oil prices.
* 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. MCX Crude oil September is likely to slide towards Rs.5300 as long as it trades under Rs.5550 level.
* MCX Natural gas August future is expected to remain under pressure and move towards Rs.245, as long as it trades under Rs.260.
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