MCX Crude oil June is likely to hold the support near Rs9000 level and rise back towards Rs9700-Rs9800 level - ICICI Direct
Metal’s Outlook
Bullion Outlook
• Spot Gold is likely to face hurdle near $4770 and move towards $4650 amid strong dollar and rising global treasury yields. Rising inflation due to higher crude oil prices would further hurt rate cut outlook from major central banks. According to the latest CME FedWatch Tool, the probability of a 25-bps rate cut this year stands at only 5% due to persistent inflation concerns. Meanwhile, safe-haven demand for the metal would limit its downside as the US and Iran failed to come to an agreement to end the war.
• In domestic market bullion prices are expected to open gap up as a 9% jump in duty would increase its landed cost. MCX Gold June is expected to move in the range of Rs 160,000-Rs168,500. Only a move above Rs168,500 it would rise towards Rs171,000.
• Internation Spot Silver is hovering around $86 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 Rs300,000-Rs305,000 level as long as it holds above Rs270,000 level
Base Metal Outlook
• Copper prices are expected to trade with positive bias driven by a combination of tightening supply and a robust demand forecast from China. A significant factor in this squeeze is the heightened tension between the US and Iran, which has effectively halted exports of sulphur and sulphuric acid from the Middle East since March. 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 towards Rs1405-Rs1410 level as long as it stays above Rs1375 level.
• MCX Aluminum May is expected to hold its ground near Rs374-Rs375 level and move towards Rs380-Rs382 level. MCX Zinc May is likely to hold support near Rs354 level and rise towards Rs365-Rs368 level
Energy Outlook
• NYMEX Crude oil prices are expected to remain elevated due to persistent supply concerns and depleting inventory levels. 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 severity of the disruption is underscored by IEA estimates that 14 million barrels per day have been removed from the market. Meanwhile, EIA projects a 2.6 million bpd global oil inventory reduction in 2026, due to Middle East conflict. Further, the EIA also projects Brent crude to peak at $115 per barrel in Q2 2026.
• MCX Crude oil June is likely to hold the support near Rs9000 level and rise back towards Rs9700-Rs9800 level.
• MCX Natural gas May is expected to face hurdle near Rs280-Rs282 level and move lower towards Rs265-Rs260 level
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