MCX Aluminum Sep is expected to slip towards Rs.255 level as long as it stays below Rs.259 level - ICICI Direct
Bullion Outlook
• Spot Gold is likely to rise further towards $3700 level despite of strong dollar and rise in U.S treasury yields across curve. Prices may move up as Fed Bank of Minneapolis President signaled 2 more rate cut this year. As per CME FedWatch tool market is pricing in 93% probability of another 25bps cut at the central bank's October meeting. Additionally, demand for safe haven may increase on escalating geopolitical tensions in Middle East and Eastern Europe, political uncertainty in France and Japan and concerns over U.S Fed independence. Moreover, precious metals prices may continue to receive support from fund buying. Furthermore, prices may rally as threat of a U.S. government shutdown surged after U.S Senate rejected a shortterm funding bill to keep federal agencies operating after September 30
• MCX Gold Oct is expected to rise towards Rs.110,500 level as long as it stays above Rs.109,400 level
• MCX Silver Dec is expected to rise towards Rs.131,000 level as long as it trades above Rs.129,000 level.
Base Metal Outlook
• Copper prices are expected to trade with a positive bias on rise in risk appetite in the global markets and signs of improving demand from China. Moreover, major central bank rate cuts across globe will boost market sentiments further. Monetary easing would prove positive for the industrial metals as lower borrowing cost tends to stimulate economic activity. Additionally, Yangshan copper premium a gauge of China's appetite for importing copper rose 1.8% to $57 a ton. While, China kept benchmark lending rates unchanged for the 4 th consecutive month in September, in line with market expectations.
• MCX Copper Sep is expected to rise towards Rs.913 level as long as it stays above Rs.900 level. A break above Rs.912 level prices may rise further towards Rs.918 level
• MCX Aluminum Sep is expected to slip towards Rs.255 level as long as it stays below Rs.259 level. MCX Zinc Sep is likely to move south towards Rs.273 level as long as it stays below Rs.278 level.
Energy Outlook
• Crude oil is likely to trade with positive bias and rise further towards $64 level amid prospect of additional EU sanctions against Russia and escalating geopolitical tension in Eastern Europe and Middle East. EU plans to ban Russian LNG imports into bloc a year earlier than predicted as part of a 19th package of sanctions. Moreover, US Fed lowered its interest rate by 25bps and signaled more rate cuts by year end, lower borrowing cost may boost economic growth and demand for oil. Meanwhile, sharp upside may be capped on strong dollar and rising supply. Iraq has increased its oil exports following easing of voluntary production cuts under OPEC+ agreement, adding more supply.
• WTI crude oil is likely to rise towards $64 level as long as it trades above $62.00. MCX Crude oil Oct is likely to rise towards Rs.5630 level as long as it stays above Rs.5460 level.
• MCX Natural gas Oct is expected to dip towards Rs.272 level as long as it stays below Rs.288 level.
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