MCX Crude oil July is likely to slip back towards Rs 5750 level as long as it stays below Rs 6000 level - ICICI Direct
Metal’s Outlook
Bullion Outlook
• Spot Gold is expected to slip back towards $3280 level on expectation of recovery in dollar and U.S treasury yields. Further, demand for safe haven may decline on optimism over possible trade deal between U.S and its major trading partners. Most of the countries will try to use new three-week window to negotiate with U.S. Additionally, investors fear that U.S President Donald Trump trade policies are inflationary in nature giving more room to Fed to keep rates steady. Moreover, US FOMC meeting minutes showed most of the policymakers expressed concern about inflationary pressures they expect from Trump's trade tariffs and some even feel no rate cut would be needed in near term
• Spot gold is likely to face stiff resistance near $3345 level and slip back towards $3280 level. MCX Gold Aug is expected to slip towards ?95,900 level as long as it stays below ?97,000 level
• MCX Silver Sep is expected to slip towards Rs 106,000 level as long as it trades below Rs 108,600 level.
Base Metal Outlook
• Copper prices are expected to trade with positive bias as U.S President Donald Trump said 50% tariff on imported copper would be effective August 1 but refrained from giving any details. Now all eyes will be on details, as which copper products would be included and will it be implemented on all partners who supply copper to U.S. This move will attract more shipments into U.S, potentially tightening global supplies. Additionally, prices may move up on optimism that most of the countries will try to negotiate with U.S in new 3-week window. Moreover, Yangshan copper premium rose to $40 a metric ton, up from 11-month low of $29, signaling robust appetite for the metal
• MCX Copper July is expected to rise further towards Rs 890 level as long as it stays above Rs 878 level. A break above Rs 890 level prices may rally further towards Rs 895 level
• MCX Aluminum July is expected to rise towards Rs 252 level as long as it stays above Rs 247 level. MCX Zinc July is likely to move north towards Rs 260 level as long as it stays above Rs 255 level.
Energy Outlook
• Crude oil is likely to slip back towards $67 amid expectation of recovery in dollar and fragile global market sentiments. Further, prices may dip as investors are worried that latest tariff announcements by U.S President Doland Trump threaten global economic growth and oil demand. Additionally, OPEC+ plans to raise production by 548,000 bpd in August and are set for another big output boost in September. Moreover, FOMC meeting minutes showed that most of policymaker are worried about rising inflation due to tariffs, indicating that central bank is not in rush to cut rates. Higher interest rates make borrowings more expensive and reduce demand for oil. Meanwhile, sharp fall may be cushioned on rising tension in Middle East and decline in U.S fuel stock, signaling demand.
• MCX Crude oil July is likely to slip back towards Rs 5750 level as long as it stays below Rs 6000 level.
• MCX Natural gas July is expected to slip further towards Rs 265 level as long as it stays below Rs 290 level.
https://secure.icicidirect.com/Content/StaticData/Disclaimer.html
SEBI Registration number INZ000183631
