MCX Copper December is expected to face the hurdle near 814 and move lower towards 800 - ICICI Direct
Metal’s Outlook
Bullion Outlook
* Spot gold is expected to face the hurdle near $2665 and move lower towards $2620 amid strong dollar. Further, growing skepticism over Fed rate cuts in January will weigh on prices. Additionally, investors will remain cautious ahead of the Fed policy outcome. More focus will be on economic projections and dot plots to get more clarity on the Fed’s next move.
* Spot gold is likely to move in the band of $2620 and $2665. But, formation of a bearish engulfing pattern could limits upward move. Meanwhile, the oscillator RSI is at 50, indicating sideways movement. MCX Gold February is expected to face stiff resistance near 77,500 and move lower towards 76,400. Only close below 76,400 it would turn more bearish.
* MCX Silver March is expected to remain in the range of 90,400 and 92,400. Below, 90,400 it would open the doors towards 89,000. On the contrary a move above 92,400 would open the doors towards 94,000.
Base Metal Outlook
* Copper prices are expected to remain under pressure amid demand concerns and fears over gradual pace of easing by the Fed. Weaker than expected economic numbers from China could dampen demand outlook. Further, lack of clarity on stimulus details from China would also limit its upside. Meanwhile, focus will remain on the Fed’s policy meeting as it will give more clarity on its interest rate outlook.
* MCX Copper December is expected to face the hurdle near 814 and move lower towards 800. Breakdown of the rising channel indicates correction in price.
* Aluminum is expected to move lower towards 240, as long as it trades under 244.50. MCX Zinc is expected to dip towards 280, as long as it trades under the 20 day EMA at 286.40
Energy Outlook
* NYMEX Crude oil is likely to find the floor near $69 and move towards $71 amid depleting crude oil inventory. API reports indicated a drop in oil inventory for the 3 rd straight week by 4.7 Million barrels. Tightening US supplies would support the prices to stay firm. But rise in gasoline inventories and sluggish demand growth from China would check its upside. Meanwhile, focus will remain on key US FOMC meeting, where Fed is expected to lower rates by 25 bps.
* On the data front, fresh addition of OI near ATM call strikes indicates oil prices to remain in the range of $69 to $71. MCX Crude oil December is likely to hold the support of 20 day EMA at 5880 and rise towards 6050. Only below 5880 it would turn weaker towards 5800.
* MCX Natural gas December future is expected to hold the support near 20 day EMA at 266 and rebound towards 280. A move above 280 would open the doors towards 288. Forecast of colder weather in US would provide support to price.
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