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Bullion Outlook

Metal’s Outlook

* Spot gold is expected to hold its ground near $2290 and rise towards $2345 on growing bets that the Federal reserve will start reducing interest rates this year. Moderation in US consumer spending last month could push the Fed to lower its rates. Further, continuous rise in net long positions in COMEX indicates bulls are still in control. Additionally, softness in the US dollar and safe haven buying could also support the bullions to trade higher.

* MCX Gold Aug is expected to hold the key support near 71,200 and move back towards 72,000. Formation of bullish engulfing pattern on the daily charts would help the metal to regain its strength. Only close below 70,800, it would weaken towards 70,200.

* MCX Silver September is expected to hold the support near 50 day EMA 89,000 and rise towards 90,500. Only move below, 89,000 it will slide towards 88,200.

Base Metal Outlook

* Copper prices are expected to remain under pressure amid demand concerns from the top metal consumer China. Contraction in the manufacturing activity in the region for 2 nd month in a row would weigh on the metal prices. Further, surge in inventory levels and low local premiums in China contradicts the copper market tightness. Additionally, increasing supply from Chile this year would bring relief to the supply tightness. This year production from Chile has gone up by 8%. Meanwhile, any sign of stimulus from China could limit the downside in the metal.

* MCX Copper July is expected to face the hurdle near 10 day EMA at 849 and move lower towards 834. Bearish crossover of 10 and 20 day EMA along with weakness in the RSI would weaken the metal.

* Aluminum is expected to trade weak and move towards 228, as long as it remains under 233 mark.

Energy Outlook

* NYMEX Crude oil is expected to hold the support near the $80.50 mark and move towards the $83.50 mark amid rise in US demand and supply concerns. Further, drop in US oil rig counts to two and half year lows ahead of the Atlantic hurricane season would hurt the oil output from US and support the prices to stay higher. Additionally, persistence geopolitical tension in the Middle East and softness in the dollar would also support the oil prices to trade higher. Meanwhile, sluggish growth in China would limit its upside.

* MCX Crude oil July is likely to hold the 20 day EMA support near 6780, and move higher towards 6900. Above 6900. it would rise towards 7000. Bullish cross over of 10 and 20 day EMA along with strength in the oscillator (RSI at 61) would support the oil prices to extend its rally.

* MCX Natural gas July is likely to dip towards 210, as long as it trades under the 10 day EMA at 230.

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