MCX Crude oil June is likely to move in the band of Rs 8200 to Rs 8700 level. Only a move below Rs 8200 it would correct towards Rs 8000 levels - ICICI Direct
Bullion Outlook
• Spot Gold is likely to consolidate in the broad range of $4500 and $4590 amid Iran deal uncertainty. Investors will keep an eye on more clarity after both sides exchanged proposals seeking revisions to a draft deal that would prolong ceasefire and reopen the Strait of Hormuz. Meanwhile, a stronger US dollar and rising Treasury yields will restrict its upside. Additionally, mixed signals from Federal Reserve officials will keep investors on the sidelines as they await incoming economic data for clearer policy direction. According to the CME FedWatch Tool, the probability of a rate hike this year has dropped to 48%, down from 60% a week ago.
• MCX Gold August is expected to move in the band of Rs159,500 to Rs162,000. Only a move above Rs162,000 it would rise towards Rs164,000.
• Spot silver is hovering below the 20 day EMA at $76.80, which is likely to act as key hurdle. On the downside $73 would act as immediate support. MCX Silver July is expected to trade in a wide range of Rs263,000-Rs272,000. Only a move above Rs272,000 it would move to Rs275,000 mark.
Base Metal Outlook
* Copper prices are expected to hold their ground and move higher amid steady demand and supply concerns. Shortages of key production materials, like sulfuric acid, have hurt copper smelting. Furthermore, a steady Shanghai Yangshan copper premium at $70 per metric ton indicates a resilient physical appetite from China, which might provide support to prices. Meanwhile, softer-than-expected Chinese manufacturing PMI numbers in May will dent sentiment. The latest reading suggested manufacturers continued to face headwinds from soft domestic demand and rising input costs linked to the ongoing conflict in the Middle East
* MCX Copper June is expected to move towards Rs1360, as long as it holds above Rs1340. Only a move above v1360, it would rise towards Rs1370 level.
* MCX Aluminum June is expected to hold its ground near Rs380-Rs382 level and move towards Rs390-Rs392 level. MCX Zinc June is likely to hold above Rs363 and move towards Rs370-Rs372 level. Only a move below Rs363 it would slip towards Rs360-Rs358.
Energy Outlook
• NYMEX crude oil is hovering near $89 per barrel mark after falling nearly 13% in May. Prices are expected to recover from here and move towards $92 mark amid uncertainty over the peace agreement between US and Iran. Both the nations have exchanged proposals seeking revisions to a draft deal that would prolong the ceasefire and reopen the Strait of Hormuz, though it remained unclear whether meaningful progress had been achieved. Still there is uncertainty, which could bring relief rally in oil prices.
• MCX Crude oil June is likely to move in the band of Rs 8200 to Rs8700 level. Only a move below Rs8200 it would correct towards Rs8000 levels.
• MCX Natural gas June is expected to rise towards Rs328-Rs330 level, as long as it holds above Rs308 level. Forecast of above average temperature in US would boost demand from electricity providers.
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