MCX Crude oil September is expected to rise towards Rs 8400 as long as it holds above Rs 8000 level - ICICI Direct
Metal’s Outlook
Bullion Outlook
• Spot Gold is expected to face resistance near $4500 and dip towards $4400 level on strong dollar and rising global treasury yields. Further, rising crude oil prices stoked inflation concerns, strengthening the prospects of rate hike from major central banks. According to CME FedWatch Tool, traders now see a 65% chance of U.S. rate hike in September, compared to 36% before Warsh's comments, and an 89% chance of a December increase. Meanwhile, safe-haven buying and strong ETF inflows likely to limit its downside.
• MCX Gold October is expected to face resistance near Rs156,500 and dip towards Rs154,000 and Rs153,000 level.
• MCX Silver December is expected to move in a wide range between Rs 238,000 and Rs 244,000 level. Only a move below Rs 238,000, it would dip towards Rs 235,500 level
Base Metal Outlook
• Copper prices are expected to trade higher on supply concerns and growing speculation over potential US import tariffs on refined copper. Supply side remained challenging, as recent data from Chile signals tightness in the physical market. Chile’s copper production in July declined by 9.4% YoY to 403.4 Kt according to national statistics agency. However, investor appetite remained subdued amid heightened geopolitical risk and higher premiums.
• MCX Copper September is expected to hold above Rs1380 level and rise towards Rs 1400 level. Only a move above Rs 1400 level, it will rise towards Rs1405- Rs1410 levels.
• MCX Aluminum September is expected to hold support above Rs 342 level and rise towards Rs 348-Rs 352. Renewed tension in the Middle East would hurt supplies and provide support to prices. MCX Zinc September is likely to find support near Rs 410 level and rise towards Rs 424 level.
Energy Outlook
• NYMEX crude futures are expected to trade higher as fresh military clashes between U.S. and Iran reignite anxiety over oil flows through the Strait of Hormuz. Further, U.S. President Donald Trump issued major warnings regarding Kharg Island, which handles 90% of Iran's crude oil exports. Any sign of further escalation would hurt global supplies and push prices higher. Prices would also get support on supply concerns from Russia. Further, depleting global crude oil and its derivative stocks would also provide support. Meanwhile, US deal with Venezuela will boost reserve and check upside in oil prices.
• MCX Crude oil September is expected to rise towards Rs 8400 as long as it holds above Rs 8000 level.
• MCX Natural gas September is expected to hold support near Rs 270 level and rise towards Rs 288 level. Forecast of hotter than normal weather in US and strong export numbers would keep prices higher.
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