MCX Crude oil Aug is likely to slip back towards Rs 5550 level as long as it stays below Rs 5800 level - ICICI Direct
Metal’s Outlook
Bullion Outlook
• Spot Gold is likely to dip towards $3320 level on expectation of recovery in dollar and U.S treasury yields following clarification from U.S President Donald trump that its highly unlikely to fire Fed Chair Powell before its term ends. Further, investors bet that US Fed if less likely to cut interest rates twice this year amid uptick in CPI, even though PPI was steady. Additionally, investors will be carefully monitoring retail sales and unemployment claims data to gauge economic health of the country. Meanwhile, demand for safe haven may increase on uncertainty over trade policies and escalating geopolitical tension in Middle East
• Spot gold is likely to slip towards $3320 level as long as it stays below $3370 level. MCX Gold Aug is expected to slip towards Rs 97,000 level as long as it stays below Rs 98,500 level
• Spot Silver is likely to fall back towards $37.30 level as long as it stays below $38.50. MCX Silver Sep is expected to dip towards Rs110,000 level as long as it trades below Rs 113,000 level.
Base Metal Outlook
• Copper prices are expected to trade with a negative bias on expectation of recovery in dollar and fears of escalating trade tension between U.S and its major trading partners. Investors will remain cautious ahead of 1 st August deadline when many trading partners will face higher trade levies. U.S till now has been able to negotiate trade deal with handful of minor trading partner. Moreover, market fears that trade tariffs could slowdown economic growth and in turn dampen demand for industrial metal. Additionally, prices may slip further amid rise in inventories at LME registered warehouses and ease in concerns over supply disruption after protesters lifted blockades in Peru.
• MCX Copper July is expected to slip further towards Rs 874 level as long as it stays below Rs 890 level. A break below Rs 874 level prices may slide further towards Rs 870 level
• MCX Aluminum July is expected to dip towards Rs 246 level as long as it stays below Rs 250 level. MCX Zinc July is likely to move south towards Rs 253 level as long as it stays below Rs 258 level.
Energy Outlook
• Crude oil is likely to slip back towards $66 amid expectation of recovery in dollar and weak global market sentiments. Further, prices may slip on concerns that higher tariffs would hurt global economic growth and dent demand for crude oil. Furthermore, US Federal Reserve is likely to hold rates steady for longer duration that previously though following rise in CPI. Higher borrowing cost for longer duration will impact economic growth negatively and sap demand for oil. Moreover, larger-thanexpected builds in U.S gasoline and diesel inventories signals weak demand. Meanwhile, sharp fall may be cushioned on rising geopolitical tension in Middle East. Two energy officials said, drone attacks for 3 rd day on oilfields in Iraq’s semi-autonomous Kurdistan region have slashed crude output by 140,000 to 150,000 barrels per day.
• MCX Crude oil Aug is likely to slip back towards Rs 5550 level as long as it stays below Rs 5800 level.
• MCX Natural gas July is expected to rise towards Rs 310 level as long as it stays above Rs 292 level.
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