MCX Gold Oct is expected to slip towards 68,400 level as long as it stays below 69,400 level - ICICI Direct
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Metal’s Outlook
Bullion Outlook
* Spot gold is expected to slip towards $2370 level amid recovery in dollar and rise in US treasury yields. Yields may move further north amid reduced expectations of aggressive Fed rate cuts. As per CME FedWatch tool traders are pricing in a nearly 70% chance of a 50 bps cut in September, down from 85% on Monday. Moreover, Fed policymakers pushed back against the notion that weaker than expected job data from US means the economy is in recessionary freefall. Additionally, rise in OI concentration at strike 2400 would act as a stiff resistance. Meanwhile, demand for safe haven may increase on escalating tension in Middle East after Hezbollah launched a series of drone and rocket attacks into northern Israel.
* MCX Gold Oct is expected to slip towards 68,400 level as long as it stays below 69,400 level
* MCX Silver September is expected to slip towards 78,000 level as long as it stays below 80,000 level
Base Metal Outlook
* Copper prices are expected to trade with negative bias as weaker than expected economic data from US stoked fears of recession ahead and mounting demand concerns in China. Further, subdued manufacturing and a grim housing market in China have hammered confidence, weighing on metal demand. Furthermore, prices may slip on persistent rise in copper stockpiles along with decline in cancel warrants at LME registered warehouses.
* MCX Copper Aug is expected to slip back towards 770 level as long as it stays below 790 level. A break below 770 level prices may skid further towards 765 level
* Aluminum is expected move south towards 211 level as long as it stays below 215 level. A break below 211 level prices may slip further towards 209 level
Energy Outlook
* NYMEX Crude oil is expected to slip further towards $71.50 level on demand concerns. Further, disappointing economic data across major countries raised concern over sluggish global economic recovery, weighing on oil prices. Moreover, rise in US crude oil inventories and fuel stock signals weak demand. As per API data crude oil stockpiles increased by about 180,000 barrels for the week ended 2 nd August, While gasoline stockpiles rose by 3.31M barrels and distillate inventories increased by 1.22M barrels. Meanwhile, sharp fall my be cushioned on escalating tension in Middle East. NYMEX Crude oil is likely to slip towards $71.50 as long as it trades below $74.0 level
* MCX Crude oil is likely to move south towards 6000 level as long as it stays below 6300 level
* MCX Natural gas Aug is likely to rise towards 178 level as long as it stays above 162 level.
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