MCX Crude oil June is likely to hold the support near Rs9000 level and rise back towards Rs9550-Rs9700 level - ICICI Direct
Bullion Outlook
• Spot Gold is likely to face hurdle near $4750 and move towards $4650 amid strong dollar and rising global treasury yields. Elevated US inflation numbers due to higher crude oil prices would hurt rate cut outlook. Rising inflation could keep interest rates higher for longer. According to the latest CME FedWatch Tool, the probability of a 25-bps rate cut this year stands at only 1%, whereas 25 bps rate hike has jumped to 32% due to persistent inflation concerns. Meanwhile, focus will remain on President Trump’s visit to China for signs of progress on the fragile trade truce and developments surrounding the Iran conflict.
• MCX Gold June is expected to move in the range of Rs160,000-Rs163,000. Only a move below Rs160,000 it would slip towards Rs158,000.
• Internation Spot Silver is hovering around $87 per ounce mark; we expect prices to rise towards $90 as long as it stays above $83 mark. MCX Silver July is expected to rise towards Rs300,500-Rs308,000 level as long as it holds above Rs295,000 leve
Base Metal Outlook
• Copper prices are expected to pause their rally after surging to multi month highs amid stronger dollar and diminishing prospects of US rate cuts. However, from a broader perspective, tightened supply and robust demand forecasts from China may limit any downside. The shortage of sulphur is forcing refiners in top countries like Chile and China to cut capacity, as the chemicals are essential for copper purification. On the demand front, Chinese demand has remained firm as Yangshan copper premium, a gauge of China's appetite for imported materials, increased to $70 a ton.
• MCX Copper May is expected to move in the band of Rs1384-Rs1410 level.
Only a move below Rs1384 , it would slip towards Rs1370 level.
• MCX Aluminum May is expected to hold its ground near Rs380-Rs382 level and move towards Rs390-Rs392 level. MCX Zinc May is likely to hold support near Rs360 level and rise towards Rs366-Rs368 level. Only a move below Rs360 it would slip towards Rs355.
Energy Outlook
• NYMEX Crude oil prices are expected to hold above $100 per barrel mark amid persistent supply concerns and depleting inventory levels. Prices would remain elevated as there is no sign of an immediate diplomatic settlement between US and Iran. Furthermore, stalled peace negotiations and the prospect of a prolonged blockade in the Strait of Hormuz are likely to disrupt oil supply, keeping prices at high levels. The IEA also warned that the global oil market is likely to remain heavily undersupplied until October even if the conflict ends next month. Meanwhile, Saudi Arabia’s oil output fell to lowest level since 1990. Today, focus will remain on meeting between US president Donald Trump and Chinese president Xi Jinping.
• MCX Crude oil June is likely to hold the support near Rs9000 level and rise back towards Rs9550-Rs9700 level.
• MCX Natural gas May is expected to hold support near Rs268-Rs270 level and move higher towards Rs280-Rs284 level.
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