MCX Gold Apr seen volatile in Rs.133,000–142,000 range - ICICI Direct
Metal’s Outlook
Bullion Outlook
* Spot gold is hovering in a broader range of $4200 and $4500 after yesterday’s sharp sell off. We expect price to find its floor near $4200 and stabilize on early sign of negotiations to end the conflict. However, Tehran denied that any negotiations were underway, while Israel continued its attacks on Iran. The outcome of any talks and the potential reopening of the Strait of Hormuz remain uncertain, keeping inflation risks elevated. Moreover, hawkish central bank comments and massive sell-off from gold ETFs could restrict upside in price. SPDR Gold Shares, plummeted 10.4% last week and reduced its individual holdings by 82,680 ounces
* MCX Gold April is expected to remain volatile and move in a broader range of Rs133,000 and Rs142,000. Only a move above Rs142,000, it would turn bullish towards Rs144,500.
* MCX Silver May is expected to move between Rs200,000 and Rs230,000. Only a move above Rs230,000 it would rise towards Rs236,000.
Base Metal Outlook
* Copper prices are likely to face resistance and trade lower amid global growth concerns and rising exchange inventories. LME copper inventory hit 347,475 tons, nearly doubling from January low of approximately 170,525. A rapid buildup of exchange stockpiles since the start of the year reflects a growing bearish mood in the physical market for copper. The discount between cash and three-month contracts recently hit its steepest level in over a year ($113.5 per ton), signaling ample near-term supply. Meanwhile, investors will eye on key manufacturing data from US and Eurozone for further cues. In the near term MCX Copper March is expected to move towards Rs1100 as long as it trades under Rs1130
* MCX Aluminum March is expected to hold above Rs324 and rise towards Rs338 level. Prices are expected to regain its strength due to supply disruption from the Middle east region.
* MCX Zinc March is likely to face hurdle near Rs316 level and move lower towards Rs302 level.
Energy Outlook
* NYMEX crude oil is hovering above $90 per barrel as Iran denies US talks. We expect, oil prices to remain volatile amid skepticism over end to the US-Iran conflict, keeping the ‘risk premium’ alive. Partial closure of the Strait of Hormuz remains the key to upside risk. Oil prices to await more clarity and confirmation from both the sides to get a clear picture on end to this conflict. For the day, NYMEX crude is likely to move in a broader range of $86 and $96. Only move below $86 it would turn weaker towards $84-$81 zone.
* MCX Crude oil April is likely to move in a broader range of Rs8200 and Rs9000. Only a move below Rs8200 it would slip towards Rs8000.
* MCX Natural gas March future is expected to slip towards Rs268-270 zone as long as it trades under Rs290. NYMEX natural gas is expected to correct further amid easing heating demand in US and rising inventory levels.
Please refer disclaimer at https://secure.icicidirect.com/Content/StaticData/Disclaimer.html
SEBI Registration number INZ000183631
