MCX Copper July is expected to rise towards Rs 1350 as- long- as it trades above Rs 1330 level - ICICI Direct
Metal’s Outlook
Bullion Outlook
• Spot gold is likely to trade higher and move towards $4200 as-long-as it holds above $4050 on softer dollar and safe-haven buying. Escalating Middle East tensions, also concerns over widening the conflict in the region would be supportive for the metal. Moreover, strong central bank buying and expectation of ETF inflows would be supportive for gold prices. Meanwhile, higher oil prices and raising inflation concerns could lead to tighter monetary policy and check its upside. Investors will also keep an eye on today’s ECB policy decision, where the central bank is widely expected to keep interest rates unchanged. However, any hawkish signals to combat rising inflation could cap the upside for bullion prices.
• MCX Gold Aug is expected to rise towards Rs 147,000 level as-long-as it holds above Rs 142,800 level. Only a move above Rs 147,000, it would rise towards Rs 148,200.
• MCX Silver September is expected to hold its ground above Rs 224,000 and rise towards Rs 230,000.
Base Metal Outlook
• Copper prices are expected to hold its gains and move higher, supported by tight raw material supplies and robust physical demand in China. A sharp spike in imported copper premiums to a 14-month high of $115 per ton will further support prices. Additionally, depleting inventories on the LME and SHFE, with SHFE stocks hitting 10-month lows and triggering a backwardation structure would provide strength. However, weaker-than-expected economic indicators from China and the prospect of a tight monetary policy from U.S. Federal Reserve are likely to cap further gains.
• MCX Copper July is expected to rise towards Rs 1350 as- long- as it trades above Rs 1330 level.
• MCX Aluminum July is expected to move higher towards Rs 347 - Rs 348, aslong- as it stays above Rs 340. MCX Zinc July is likely to rise towards Rs 386 as- long- as it trades above Rs 378 - Rs 379 level.
Energy Outlook
• NYMEX crude is likely to hold its gains above $85 and move higher towards $90-$92 amid growing risk to global energy supplies. Recent attacks on Saudi oil tankers in the Red Sea by Iran-backed Houthi militants have raised concerns of broader supply disruptions across key shipping routes. The escalation opened a new front in the conflict, compounding risks to maritime traffic across the Red Sea and the Strait of Hormuz. Meanwhile, US forces struck Iranian targets for the 12th consecutive night, as both Washington and Tehran continued to dismiss the possibility of peace negotiations.
• The oil market structure remains in steep backwardation, with near-month prices commanding a $2.4 per barrel premium over later-dated contracts, pointing to severely tighter prompt supplies and geopolitical supply risks. MCX Crude oil August is likely to move towards Rs 8700 - Rs 8900 as-long-as it holds above Rs 8200.
• MCX Natural gas July is expected to hold above Rs 275 and rise towards Rs 290.
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