MCX Gold Aug Seen Trading Between Rs 142,500 – Rs 145,500 - ICICI Direct
Metal’s Outlook
Bullion Outlook
• Spot gold is likely to trade lower on strong dollar and rise in US treasury yields. Further, renewed conflict between US and Iran drove oil prices higher, fueling expectation of interest rate hike to curb inflation. On Sunday, US carried out fresh strikes against Iran in retaliation for an Iranian attack on a commercial ship. Further, Iran declared that the Strait of Hormuz would be closed “until further notice”. Meanwhile, September rate hike has moved to 72% from 54% a week ago, which is likely to weigh on prices. Further, investors will eye on this week’s key US inflation numbers and Fed Chair Kevin Warsh’s testimony on Tuesday to get more clarity on monetary policy.
• MCX Gold Aug is expected to move in the wider range of Rs 142,500 - Rs 145,500 level. Only a move below Rs 142,500 level, it would turn weak.
• Spot silver is expected to move in the band of $57.50 and $61. Only below $57.50 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 228,000.
Base Metal Outlook
• Copper prices are expected to trade lower amid strong dollar and geopolitical uncertainty in the Middle East. Risk-off sentiments in the global markets have hampered the broader outlook of manufacturing activity and it is likely to impact its demand outlook. Moreover, inflation concerns would strengthen tighter monetary policies form major central banks and drag metal prices lower. Meanwhile, supply headwinds in South America, depleting inventory levels and expectation of higher US tariff policies would limit downside in metal prices.
• MCX Copper July is expected to slip towards Rs 1180 - Rs 1175 as long as it trades under Rs 1305 level.
• MCX Aluminum July is expected to move higher towards Rs 342 - Rs 345, as long as it stays above Rs 335. MCX Zinc July is likely to dip towards immediate support at Rs 370 level on the upside key hurdle exists near Rs 378 - Rs 380 level. Losses in the metal to be limited amid supply concerns from a major global smelters in South Korea.
Energy Outlook
• NYMEX Crude is trading higher amid renewed US-Iran tension. Both the nations exchanged fresh strikes over the weekend amid ongoing tensions over shipping through the Strait of Hormuz. The recent escalation has weakened the prospects of diplomacy and raised concerns over oil supplies through the Strait of Hormuz. Further, any sign of delay in negotiation and prolonged tension could delay rebuilding of oil inventories and disrupt the expected oil market balance. Furthermore, the NYMEX futures curve has shifted into backwardation, indicating a near-term supply crunch that could delay global inventory replenishment
• NYMEX crude oil is likely to move in the band of $72 and $76 with positive bias. Only a move above $76 it would turn bullish towards $79. MCX Crude oil July is likely to move in the band of Rs 6800 - Rs 7300. Only a move above Rs 7300 it would turn bullish towards Rs 7500 level.
• MCX Natural gas July is expected to fall towards Rs 274 - Rs 275 level as long as it stays below Rs 285 level.
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