Gold Seen Weak Below Rs 145,500; MCX May Slip to Rs 142,000 - ICICI Direct
Metal’s Outlook
Bullion Outlook
• Spot gold is likely to trade lower on strong dollar and higher inflation concerns. Renewed conflict in the Middle East could disrupt supplies from the region and intensify inflation pressures. As per the CME Fed-watch tool, September rate hike probability has jumped to 68% from 61% a day ago. Further, hawkish comments from ECB on increasing interest rates would likely to weigh on gold prices. Additionally, sluggish jewellery demand growth and slowdown in ETF inflows would also weigh on prices. Meanwhile, investors will eye on key US economic numbers and comments from US Fed member William for further clues on the policy outlook.
• Spot gold is likely to face hurdle near $4130 and move lower towards $4000. MCX Gold Aug is expected to slip towards Rs 142,000- Rs 142,500 level as long as it trades under Rs 145,500 level.
• Spot silver is expected to move in the band of $57 and $60 with bearish bias. Only below $57 it would slide towards $55 mark. MCX Silver September is expected to slip towards Rs220,000 level as long as it stays under Rs 231,000.
Base Metal Outlook
• Copper prices are expected to trade lower amid strong dollar and rising geopolitical tensions. Further, slowing growth stemming from geopolitical conflicts and potential shifts in US tariff policies along with high global interest rate expectations would likely to weigh on prices. Moreover, sluggish demand growth in China as softer inflation number in three months would likely to weigh on prices. Meanwhile, tightness in the global copper concentrate and depleting LME inventory levels would provide support to prices.
• MCX Copper July is expected to move lower towards Rs 1255 as long as it trades under Rs 1275 level. Only a move below Rs 1255 it would slip towards Rs1240.
• MCX Aluminum July is expected to move in the band of Rs 335 and Rs 340. Only a move above Rs340 level it would open the doors towards Rs 345. MCX Zinc July is likely to hold support Rs 365 level and rise towards Rs 370- Rs 372 level. Only a move below Rs 365 it would slip towards Rs 360.
Energy Outlook
• NYMEX Crude is expected to trade with positive bias amid renewed supply disruption fears. Following a second straight day of confirmed U.S. military strikes against Iran, tensions have severely escalated. U.S. President Donald Trump has warned of additional military measures, including a potential blockade, and cautioned that oil prices could surge higher if future strikes target Kharg Island. With the Strait of Hormuz at the heart of the standoff, hostilities have renewed fears that the collapse of the interim peace agreement will severely choke Middle Easter crude exports.
• NYMEX crude oil is likely to rise towards $76 as long as it holds above $70. MCX Crude oil July is likely to rise towards Rs 7300 - Rs 7400, as long as it trades above Rs 6900 level.
• MCX Natural gas July is expected to rise towards Rs 315 - Rs 318 level as long as it stays above Rs 300 level. Meanwhile, trades will eye on the weekly inventory data for more cues.
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