MCX Aluminum May is expected to slip towards Rs 360-Rs 357 level as long as its stays below Rs 371 level - ICICI Direct
Metal’s Outlook
Bullion Outlook
* Spot Gold is likely to slip towards $4500 level amid firm dollar and rise in US treasury yields. Further, prices may slip as US Federal Reserve left interest rate unchanged but signaled that policymakers are worried about rising inflation which led to their most divided votes. Traders are now pricing in no rate cut this year and may be 25% chance of rate hike next year. Furthermore, stalled peace talk between US and Iran and ongoing blockage in Strait of Hormuz, refueled concerns over rising inflation and monetary tightening across major economies. Moreover, Iran and US, both are blocking the waterway to gain leverage during extended ceasefire, disrupting oil supply and keeping prices at elevated level. Investors will remain cautious ahead of BOE and ECB monetary policy and slew of economic data from US to gauge economic health of the country and get more clarity on rate trajectory. MCX Gold June is expected to face resistance near Rs 151,000 level and slip towards Rs 148,000-Rs 147,000 level.
* MCX Silver July is expected to slip towards Rs 236,000-Rs 234,000 level as long as it stays below Rs 244,000 level
Base Metal Outlook
* Copper prices are expected to trade with negative bias amid firm dollar following some Fed officials turning hawkish. Furthermore, weak global market sentiments and persistent rise in inventory at LME registered warehouses would weigh on prices. Additionally, copper may face headwinds from inflation concerns as it may prompt tighter monetary policy in major economies, alongside growth risk that may hurt demand for industrial metal. Meanwhile, sharp fall in the prices may be cushioned on prospect of stronger demand in China and restocking activity ahead of labor day holiday. Yangshan copper premium, a gauge of China's appetite for imported materials, stood at $64 a ton, signaling demand
* MCX Copper May is expected to slip towards Rs1260 level as long as it stays below Rs1295 level. A break below Rs 1260 level prices may be pushed towards Rs 1255-Rs 1250 level
* MCX Aluminum May is expected to slip towards Rs 360-Rs 357 level as long as its stays below Rs 371 level. MCX Zinc May is likely to face stiff resistance near Rs 344 level and slip towards Rs 336 level
Energy Outlook
* NYMEX Crude oil is likely to trade with positive bias on lingering concerns over supply constraint due to blockade of Strait of Hormuz. Further, hopes of diplomatic breakthrough is fading as efforts to revive talks stalled and both nations shows little sign of softening. Additionally, as per media report US President Donald Trump rejected Iran’s recent proposal to reopen strait. Moreover, US President spoke with oil companies about how to mitigate the impact of possible month-long US blockade of Iran’s port, prompting concerns of an extended disruption to supplies. Additionally, OPEC+ is likely to agree to small increase of 188,000 bpd in oil output quotas, but production increase is unlikely to affect market with Strait of Hormuz closed and other production disruption due to war.
* MCX Crude oil May is likely to rise towards Rs10,500-Rs10,700 level as long as it stays above Rs 9800 level.
* MCX Natural gas May is expected to dip towards Rs 240-Rs 235 level as long as it stays below Rs 262 level.
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