Crude oil is likely to trade with positive bias on trade optimism and supply constraints - ICICI Direct
Bullion Outlook
* Spot Gold is likely to face stiff resistance near $3400 and move back towards $3350 on strong dollar and higher global treasury yields. Better than expected US job market has reinforced the view that the US Federal Reserve would hold its rates steady this time. Additionally, the probability of two rate cuts also getting trimmed. Furthermore, growing optimism over US and EU trade deal would likely to ease the safe haven demand and weigh on the yellow metal prices. Meanwhile, slowdown in gold consumption during first half of China and outflow from ETFS would check its upside
On the data front, a strong call base at 3450 would act as key hurdle for prices. MCX Gold Aug is expected to face strong resistance near Rs.99,500 level and move back towards Rs.98,000 level.
* MCX Silver Sep is expected to move in the band of Rs.114,000 and Rs.116,200 level. Only below Rs.114,000, it would turn bearish
Base Metal Outlook
* Copper prices are expected to hold its ground and trade with a positive bias on optimistic global market sentiments. Additionally, growing bets of trade deal between US and EU nations would also support risk sentiments. Meanwhile, contraction in manufacturing activity in US and Europe would restrict any major upside. Additionally, investors will remain cautious ahead of 1 st August deadline on 50% tariff on copper imports to US. On the inventory front, LME copper stocks continued to see addition, which might restrict its upside. During the day investors will eye for SHFE weekly inventory levels and other key economic numbers to get more clarity in price trend.
* MCX Copper July is expected to rise towards Rs.902 level as long as it stays above Rs.889 level. A break below Rs.889 level prices may turn weak towards Rs.880 level
* MCX Aluminum July is expected to face resistance near Rs.256 level and correct towards Rs.253 level. MCX Zinc July is likely to move north towards Rs.272 level as long as it stays above Rs.266 level.
Energy Outlook
* Crude oil is likely to trade with positive bias on trade optimism and supply constraints. Growing prospects of trade deal optimism with EU similar to the deal with Japan would increase risk-on sentiments and support oil prices. On the supply side, tightening conditions in the global diesel market would support prices to stay higher. Meanwhile, investors will eye on nuclear talks in between Iran and EU nations on Friday, any positive outcome will restrict upside in prices.
* On the data front, 65 put strike has highest OI concentration which would act as key support. On the upside $68 and $70 would likely to act as immediate hurdle. MCX Crude oil Aug is likely to hold the key support at Rs.5580 level and rebound towards Rs.5800 level.
* Natural gas is likely to find the floor near Rs.260 and rebound towards Rs.274. Only a move below Rs.260 it would slide further towards Rs.254 mark.
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