MCX Gold Feb is likely to move higher towards Rs.138,500 as long as it holds above 136,800 - ICICI Direct
Metal’s Outlook
Bullion Outlook
* Spot Gold is expected to trade higher and move towards $4580 per ounce on weaker dollar and growing prospects of more rate cuts from the US Federal Reserve. As per the CME Few-watch tool March rate cut probability has remained above 45%, whereas January rate cut probability dipped to 14%. Further, expectation of sluggish growth in the US labor market would force the Fed members to support loose monetary policy. In addition to that, safe haven appeal and central bank buying would also support prices to trade higher. For the day, spot gold is likely to hold support at $4470 and move higher towards $4550 per ounce. Only a move above $4550 per ounce it would rise towards $4600 per ounce.
* MCX Gold Feb is likely to move higher towards Rs.138,500 as long as it holds above 136,800. A move above Rs.138,500, it would rise towards Rs.140,000.
* MCX Silver March hold strong support at Rs.215,500 level and move higher towards Rs.224,000. Above Rs.224,000 it would rise toward Rs.226,400.
Base Metal Outlook
* Copper prices are expected to hold its ground and move higher on tight supplies and strong demand from China and US. Lower treatment and refinery charges for the coming year has again sparked concerns over raw material availability. Strong demand from China would help metal prices as Yangshan premiums hit a one month high at 55. Prices would also get support on growing bets of fresh round of stimulus from China to counter slowdown in the property sector. Moreover, increasing prospects of lose monetary policy would again strengthen the bullish bias in the red metal.
* MCX Copper Dec is expected to hold support near Rs.1128 and move higher towards Rs.1150 level. A move above Rs.1150 level it would open the doors towards Rs.1158-Rs.1060 level.
* MCX Aluminum Dec is expected to rise towards Rs.287 level as long as it stays above Rs.280 level. Only a move below Rs.280, it would slip towards Rs.275. MCX Zinc is likely to move in the band of Rs.302 and Rs.310. Only a move below Rs.302 it would slide towards Rs.298 mark.
Energy Outlook
* NYMEX crude oil is expected to hold support near $57 per barrel and move higher towards amid escalating geopolitical tension between US and Venezuela. Ukraine drone attacks have targeted at least 28 Russian refinery over last 3-months, which would hurt oil export capabilities. Prices would also get strong support from weak dollar and growing optimism over loose monetary policy from the US Fed. Meanwhile, higher global supplies from OPEC+ and expectation of steady flows in the first quarter would limit its upside. further rising inventory levels would also limit its upside.
* On the data front, a strong put base at $55 would act as strong support. On the upside a strong call base at $60 would act as major hurdle. MCX Crude oil Dec is likely to hold support at Rs.5160 and move higher towards Rs.5320 level. Only move above Rs.5320 it would rise towards Rs.5400.
* MCX Natural gas Jan is expected to hold support near Rs.325 and move higher towards Rs.355 level.
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