MCX Copper July is expected to slip towards Rs 1225 level as long as it stays below Rs 1260 level - ICICI Direct
Metal’s Outlook
Bullion Outlook
• Spot Gold is likely to remain under pressure and slip towards $3920 level amid firm dollar. Further, prices may slip on growing conviction that US Federal Reserve may maintain hawkish stance and hike interest rate this year. Last week policy meeting was largely seen as hawkish by investors prompting greater shift towards monetary policy despite of declining crude oil prices cooled inflation concerns. According to CME FedWatch tool markets are now pricing 84% chance of a rate hike in December, up from 61% before the Federal Reserve's meeting last week. Additionally, investors will remain cautious ahead of US Personal Consumption Expenditures data, Fed preferred inflation measure to get more cues on interest rate trajectory. If data comes hotter than expected we may see further downside in prices as rate hike expectations may increase further. Meanwhile, some bargain hunting may be witnessed at lower levels. MCX Gold Aug is expected to slip further towards Rs 140,000-Rs139,000 level as long as it stays below Rs144,000 level
• MCX Silver July is expected to dip towards Rs 208,000-Rs206,000 level as long as it stays below Rs 222,000 level.
Base Metal Outlook
• Copper prices are expected to trade with negative bias amid strong dollar and weak global market sentiments. Further, expectation of mixed batch of economic data from US would weigh on prices. Furthermore, prices may slip on concerns that tighter monetary policy in major economies may push borrowing cost higher clouding outlook for global economic growth and industrial metal demands. Meanwhile, sharp fall in prices may be cushioned on ongoing concerns about US import tariffs and persistent decline in inventory at LME registered warehouses.
• MCX Copper July is expected to slip towards Rs 1225 level as long as it stays below Rs 1260 level. A break below Rs 1225 level prices may be pushed towards Rs1220-Rs1215 level
• MCX Aluminum July is expected to slip towards Rs 324-Rs 320 level as long as its stays below Rs 336 level. MCX Zinc July is likely to face stiff resistance near Rs 357 level and slip towards Rs346-Rs343 level.
Energy Outlook
• NYMEX Crude oil is likely to trade with negative bias amid ease in supply concerns as US and Iran both indicated early progress in talks to find a permanent solution to end the war in Middle East . Further, prices may dip on signs of gradual reopening of Strait of Hormuz and increased movement of ships through Strait. Oman has opened temporary routes to ease tanker departures with International Maritime Organization. Furthermore, prices may slip as US issued a 60-day license allowing Iran to sell oil on the international market, adding more oil in market. Additionally, U.S. President Donald Trump confirmed that Iran has agreed to keep the strait open with no toll or any other fee collection for all ships passing trough strait. Meanwhile, investors will keep an eye on how quickly Middle Eastern producers can resume oil production and exports following damage from the war, and whether more ships will enter the region. MCX Crude oil July is likely to slip towards Rs 6500-Rs 6400 level as long as it stays below Rs6900
• MCX Natural gas July is expected to rise towards Rs315-Rs 320 level as long as it stays above Rs 300 level.
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