Gold is expected to hold above $2865 and trade with positive bias amid safe haven buying - ICICI Direct
Bullion Outlook
• Gold is expected to hold above $2865 and trade with positive bias amid safe haven buying. Looming threat of tariffs after US President Donald Trump reiterated to impose reciprocal tariffs on every country has reignited fears of a widening Global trade war. Further, strong physical demand in US and UK amid the tariff threats would support the bullions to trade higher. Meanwhile, investors will keep an eye on US PPI data to get further clarity on monetary policy.
• On the data front, a strong call base near $2950 in COMEX Gold March indicates price may face stiff resistance. MCX Gold April is expected to remain in the band of Rs 84,800 and Rs 85,800 level. Below Rs 84,800 level prices may slip towards Rs 84,200 level.
• Sop silver, is expected to dip towards $31.70, if held then it would again rebound towards $32.60. MCX Silver March is expected hold the support near Rs 94,000 and trade higher towards Rs 96,200.
Base Metal Outlook
• Copper prices are expected to hold its gains amid tight supply and higher premiums in CME. Further, China has tightened its requirement around building new copper smelter. Companies must control enough mine supply to feed the plants. Meanwhile, strong dollar and diminishing prospects of rate cut by US would restrict the upside in the base metals.
• MCX Copper February has formed a bullish engulfing pattern, which could support prices to hold firm above Rs 850. We expect Copper to rise towards 872 levels from, the current levels.
• MCX Aluminum Feb is expected to find support near 10-day EMA Rs 254 level and move higher towards Rs 260 level. MCX Zinc Feb is likely to hold the support at Rs 266 and move higher towards Rs 271 level.
Energy Outlook
• NYMEX Crude oil is expected to trade lower amid growing speculation that a resolution between Russia and Ukraine could reduce supply risk. US president Donald Trump and Russian president Vladimir Putin had agreed to open negotiations aimed at ending the ongoing war in Ukraine. Further, hawkish Fed comments and rise in US inflation numbers has reduced the chances of 2 rate cuts this year, which could again restrict the upside in oil prices.
• On the data front, strong put base near the 70 put strike would act as major support. On upside addition of OI in ATM and OTM call strike suggest prices to face stiff resistance near $73 and $75. MCX Crude oil Feb is likely to face the hurdle near ?6330 and move lower towards Rs 6100.
• MCX Natural gas Feb is expected to hold its ground and move towards Rs 320 as long as it holds above Rs 298. Forecast of colder weather in US and rising export demand would help prices to trade firm.
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