MCX Gold April bullish above 140000, target 148000 - ICICI Direct
Metal’s Outlook
Bullion Outlook
• Spot gold is expected to hold support near $4350 and move higher towards $4600 per ounce amid safe haven buying. Escalating geopolitical tension in the Middle east would force investors to go after safe havens. Tension in the Middle east signals no sign of relief as the conflict extended for 1 month. Meanwhile, a stronger dollar fueled by high inflation expectations and potential central bank rate hikes is likely to check its upside. On the data front, CFTC net speculative longs have increased to 168.3K, signaling fresh long addition.
• MCX Gold April is expected to rise towards Rs146,000, as long as it moves above Rs140,000. Only a move above Rs146,000, it would rise towards Rs148,000.
• MCX Silver May is expected to move in the range of Rs220,000 and Rs234,000. A move below Rs220,000 it would turn weaker towards Rs214,000.
Base Metal Outlook
* Copper prices are expected to remain under pressure amid stronger dollar and heightened geopolitical uncertainties. Escalating US-Iran tensions would hurt demand outlook. Furthermore, rising inventory levels in LME would also restrict any major upside in prices. Meanwhile, a surprise jump in the Yangshan copper premium to $68 per tonne indicates a steady recovery in Chinese appetite for imported copper, reaching a nine-month high. A steady recovery in Chinese appetite for imported copper would limit its downside.
* In the near term MCX Copper April is expected to move in the band of Rs1135 and Rs1160. Only a move below Rs1135 it would turn weaker
* MCX Aluminum March is expected to hold above Rs335 and rise towards Rs345 level amid heightened supply concerns after 2 major production sites in Middle East were hit by Iranian strikes
* MCX Zinc March is likely to face hurdle near Rs317 level and move towards Rs310 level.
Energy Outlook
* NYMEX crude oil is expected to trade higher amid supply disruption concerns and widening Middle east conflict. Yemen’s Houthi rebels have intensified their involvement in the regional conflict by launching a second wave of missile and drone attacks against Israel within 24 hours, directly threatening maritime security in the Red Sea. Their involvement has raised concerns on disruption of critical shipping lanes. Oil prices will remain volatile amid no sign of near-term solution to the war as it entered 5 th week.
* NYMEX crude oil is expected to move towards $108, as long as it holds above $98. MCX Crude oil April is likely to move in a broader range of Rs9200 and Rs9700. Only a move above Rs9700 it would rise towards Rs9950.
* MCX Natural gas April future is expected to hold support at Rs280 and move higher towards Rs296.
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