Gold may floor near $5,000/oz, rebound to $5,200 safe-haven demand - ICICI Direct
Bullion Outlook
* Spot gold is poised to establish a floor near $5,000 per ounce, with a projected recovery toward $5,200 driven by robust safe-haven demand. Persisting Middle East volatility and global trade frictions remain primary catalysts for price support. Additionally, last month’s lackluster U.S. employment data has intensified expectations for an accelerated ratecut cycle, further brightening the outlook for bullion. While a resurgent dollar and sporadic liquidation may temper the rally.
* MCX Gold April is expected to find the floor near Rs.158,000 and move higher towards Rs.163,500.
* International Spot silver is hovering in the band of $78 and $85. Only a move below $78, prices could correct towards $74 level. MCX Silver May is expected to move in the band of Rs.257,000 to Rs.272,000. Only a move below Rs.257,000, it would correct towards Rs.254,000
Base Metal Outlook
* Copper prices are expected to trade lower as risk-off sentiment permeates global markets. Escalating geopolitical tensions in the Middle East are likely to dampen demand prospects. Furthermore, sluggish demand from Chinese buyers and a steady build-up of both domestic and LME inventory levels are expected to weigh on prices. Notably, LME copper stocks recently hit a one-year high of 284,325 tonnes. In the near term MCX Copper March is projected to move toward Rs.1,180, provided it remains below Rs.1,210 resistance level. A sustained move below Rs.1,180 would turn the outlook bearish targeting Rs.1,170 level.
* MCX Aluminum March is expected to hold above Rs.332 and rise towards Rs.342 level. A move above Rs.342 it would rise towards Rs.348. Prices are expected to remain higher due to intense geopolitical tensions in the Middle East and critical supply chain disruptions.
* MCX Zinc March is likely to face hurdle near Rs.326 level and move lower towards Rs.318 level.
Energy Outlook
* NYMEX crude oil is currently hovering above $108 per barrel, representing an 18% gain this Monday. Prices are projected to remain volatile with an upward bias as Middle East hostilities persist. This firm trading environment is driven by significant regional supply contractions, exacerbated by the closure of the Strait of Hormuz. Notably, Kuwait has implemented precautionary production and refinery cuts, while Iraqi output from major southern fields has dropped 70% to just 1.3 million barrels per day
* MCX Crude oil March is likely to open gap up and move towards Rs.9900 to Rs.9980 zone as long as it holds above Rs.9200.
* NYMEX Natural gas is likely to trade higher amid growing fears that the escalating conflict in the Middle East could lead to longer-term disruption of global gas supplies. MCX Natural gas March future is expected to rise towards Rs.320 as long as it holds above Rs.290.
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