MCX Crude oil July is likely to slip towards Rs 5600 level as long as it stays below Rs 5850 level - ICICI Direct
Metal’s Outlook
Bullion Outlook
• Spot Gold is expected to hold the support near $3300 level and move higher towards $3350 amid safe haven buying. Investors will move towards the safer asset class amid rising US Govt. debt and trade deal uncertainties. Recent announcements from US President Donald Trump has sparked tariff uncertainty, which would support the bullions to hold its ground. On the other hand, diminishing probability of early rate cut by the Fed in July could restrict the upside in the yellow metal. A stronger dollar and rise in US treasury yields would limit any major upside in the bullions.
• Spot gold is likely to hold support near 50-day EMA at $3280 per ounce and move back towards $3350 level. MCX Gold Aug is expected to hold the support of Rs 96,000 level and rebound towards Rs 97,700 level
• MCX Silver Sep is expected to dip towards Rs 106,800 level as long as it trades under Rs 108,500 level. A strong dollar and trade tariff concerns would hurt its demand outlook.
Base Metal Outlook
• Copper prices are expected to trade with negative bias amid uncertainty surrounding trade deal. Announcement of tariffs on countries like Japan, South Korea could weigh investor sentiments and bring liquidation in prices. Further, rise in SHFE stocks and declining copper premiums in China would likely to weigh on metal's prices. Additionally, a strong dollar and forecast of weaker economic numbers from China would counter the supply concerns.
• MCX Copper July is expected to slip further towards Rs 880 level as long as it stays below Rs 896 level. A break below Rs 880 level prices may slide further towards Rs 875 level
• MCX Aluminum July is expected to slip towards Rs 246 level as long as it stays below Rs 250 level. MCX Zinc July is likely to move south towards Rs 252 level as long as it stays below 50-day EMA at Rs 256 level.
Energy Outlook
• Crude oil is likely to slip towards $65 amid concerns over US tariffs and rising supply from OPEC+. The group agreed to raise output by 548,000 barrels per day in August, up from previous monthly increases of 411,000 bpd. Accelerated production hikes will raise concerns about oversupply, which is almost 80% of the 2.2 million bpd voluntary cuts from OPEC. Adding to the bearish sentiment, investors continued to assess the potential impact of US tariffs on global fuel demand. Meanwhile, renewed tension in the Middle East after Houthi rebels attack on vessels at Red sea could disrupt supplies.
• MCX Crude oil July is likely to slip towards Rs 5600 level as long as it stays below Rs 5850 level. A higher OI concentration in OTM call strikes indicates prices to face stiff resistance.
• MCX Natural gas July is expected to rise towards Rs 300 level as long as it stays above Rs 282 level.
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