MCX Gold Aug Eyes Rs 143,000 – Rs 147,000 Range; Below Rs 143,000 Weakens Trend - ICICI Direct
Metal’s Outlook
Bullion Outlook
• Spot gold is likely to find support near $4050 and move higher towards $4200 on soft dollar and correction in US treasury yields. Further, growing optimism over continued US-Iran peace negotiations despite recent escalation would improve oil flows through the Strait of Hormuz and cool down inflation pressures. Meanwhile, September rate hike has moved to 65% from 68% a day ago, which is likely to provide support to prices. Further, dovish comments from Fed member John Williams would be supportive for gold prices. At the same time, focus will remain on developments from the Middle East, any sign of further escalation would bring volatility again and limit upside in precious metals.
• MCX Gold Aug is expected to move in the wider range of Rs 143,000 - Rs 147,000 level. Only a move below Rs 143,000 level, it would turn weak.
• Spot silver is expected to move in the band of $57 and $61. Only below $57 it would slide towards $55 mark. MCX Silver September is expected to slip towards Rs 220,000 level as long as it stays under Rs 231,000.
Base Metal Outlook
• Copper prices are expected to trade with positive bias, amid strong demand from China, depleting global copper concentrates and supply headwinds in South America. Further, depleting inventory levels and expectation of higher US tariff policies would keep prices at elevated levels. Meanwhile, rising geopolitical tensions and high global interest rate expectations would likely to limit upside in metal prices.
• MCX Copper July is expected to move towards Rs 1305 as long as it trades above Rs 1280 level. Only a move above Rs 1305 it would rise towards Rs 1315.
• MCX Aluminum July is expected to move higher towards Rs 348 - Rs 350. On the downside, immediate support holds near Rs 340 level. MCX Zinc July is likely to hold support Rs 370 level and rise towards Rs 378 - Rs 380 level. Price to remain higher as fire at a major zinc smelter in South Korea operated by Young Poong Corporation would hurt global supplies.
Energy Outlook
• NYMEX Crude is expected to trade in a wide range of $70 and $74 amid growing uncertainties over US and Iran peace talks. The United States has refrained from conducting new strikes on Iran over the past few hours following two days of military operations and remains committed to a diplomatic resolution. Any sign of de-escalation in the region and flow of oil through the Strait of Hormuz would ease supply concerns. On the other hand, further attacks could trigger sharp rally in oil prices. Focus will remain on Iran’s next action which could bring further clarity.
• NYMEX crude oil is likely to move in the band of $70 and $74. Only a move above $74 it would turn bullish. MCX Crude oil July is likely to move in the band of Rs 6700 - Rs 7100. Only a move above Rs 7100 it would turn bullish towards Rs 7300 level.
• MCX Natural gas July is expected to fall towards Rs 280 - Rs 278 level as long as it stays below Rs 300 level.
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