Crude oil is likely to trade lower on slowing demand from US - ICICI Direct
Bullion Outlook
* Spot Gold is likely to find support near its 50-day EMA at $3330 and rebound towards $3375 on soft dollar and growing probability of more than 2 rate cuts in this year. Softer than expected US inflation numbers has increased the probability of September and October rate cut. Additionally, tariff concerns and uncertainty over this week’s TrumpPutin meet would likely to support prices. Furthermore, fund buying continues to support prices as gold holding in ETF’s rose to a 2-year high and silver holdings in ETF reached a 3-year high last week. Meanwhile, investors will eye on key US PPI numbers to get further clarity.
* MCX Gold October is expected to hold the support near Rs 99,500 and move back towards Rs 101,200 level.
* MCX Silver Sep is expected to hold support at Rs 112,500 and move higher towards Rs 114,600 level. Only above Rs 114,600, it may rise towards Rs 115,200.
Base Metal Outlook
* Copper prices are expected to hold its gains amid soft dollar and improved risk sentiments after US-China trade truce. Additionally, prices may find support on growing bets of more than 2 rate cuts by the Fed. Meanwhile, investors will eye on key economic numbers from China to get more clarity.
* MCX Copper August is expected to hold its 50-day EMA support at Rs 884 and move higher towards Rs 900 level.
* MCX Aluminum August is expected to consolidate in between Rs 252 and Rs 256 level. Only above Rs 256, it would turn bullish towards Rs 259. MCX Zinc August is likely to move north towards Rs 272 level as long as it stays above Rs 268 level.
Energy Outlook
* Crude oil is likely to trade lower on slowing demand from US. Rising API crude oil inventories indicates the end of seasonal summer demand period. Crude inventories in the U.S., the world's biggest oil consumer, rose by 1.52 million barrels last week. Gasoline inventories dropped while distillate inventories gained slightly. Further, forecast of higher output in the coming year by OPEC and the EIA would weigh on oil prices. Meanwhile, focus will remain on key US and Russia talks on this Friday and key economic numbers from US.
* 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 Aug is likely to consolidate in the band of Rs 5500 and Rs 5700 level. A move below Rs 5500 would turn weaker.
* MCX Natural gas August future is expected to remain under pressure and move towards Rs 235, as long as it trades under Rs 255.
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