MCX Copper July Seen Rising Above Rs 1300 - ICICI Direct
Metal’s Outlook
Bullion Outlook
• Spot gold is likely to hold its ground above $3980 and push higher toward $4120, aided by a softer dollar and easing rate-hike bets. Following recent inflation data, rate-hike expectations dipped to just 15% for July and 57.8% for September, down from 41% and 74%, respectively. Furthermore, the Fed Chair’s lack of clarity regarding an aggressive policy stance is likely to support prices. Meanwhile, renewed U.S.-Iran tensions have lifted oil prices and kept inflation concerns alive. Additionally, investors will eye on key US Production Price index data and comments from Fed members for more clarity on policy stance.
• MCX Gold Aug is expected to hold above Rs 140,000 level and rise towards Rs 143,500 level. Only a move above Rs 143,500, it would turn bullish towards Rs 145,500.
• MCX Silver September is expected to hold above Rs 218,000 and move back towards Rs 226,000. Above Rs 226,000, it would rise towards Rs 230,000
Base Metal Outlook
• Copper prices are expected to extend its rally amid structurally supply shortages and depleting stockpiles in LME. Further, strong demand from the energy transition and AI infrastructure would keep prices higher. In June Chinese export hit record 412$ billion, where half of its growth driven by the global AI boom related hardware, like AI chips, computing hardware and smart devices. Further, supply headwinds in South America and expectation of higher US tariff policies would also support metal prices. On the other hand, escalating geopolitical tension in the Middle East could hurt risk sentiments and check it upside.
• MCX Copper July is expected to rise towards Rs 1325 - Rs 1330 as long as it trades above Rs 1300 level.
• MCX Aluminum July is expected to move higher towards Rs 345 - Rs 346, as long as it stays above Rs 339. MCX Zinc July is likely to hold above Rs 373 and rise towards Rs 378 - Rs 380 level. Losses in the metal to be limited amid supply concerns from a major global smelters in South Korea.
Energy Outlook
• NYMEX crude is likely to hold above $77 and move toward $81.50 per barrel amid escalating geopolitical tensions in the Middle East. Following the reinstatement of the U.S. blockade against Tehran in the Strait of Hormuz, President Trump threatened additional military strikes on Iran. He warned that operations would continue and that the U.S. could target Iranian power plants and bridges unless Tehran returns to the negotiating table. Furthermore, depleting U.S. inventory levels and declining Strategic Petroleum Reserve (SPR) balances over the last three months are expected to provide strong price support. However, sluggish demand from China likely to cap any major upside.
• MCX Crude oil July is likely to move towards Rs 7900 - Rs 8000. On the downside key support holds above Rs 7400.
• MCX Natural gas July is expected to hold above Rs 270 - Rs 272 level and rise towards Rs 285 level.
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