MCX Natural gas Feb is expected to move lower towards Rs.340, as long as it trades under Rs.365 - ICICI Direct
Metal’s Outlook
Bullion Outlook
* Gold is expected to hold the key support near $2925 and move higher towards $2960 amid increasing safe haven demand. Meanwhile, weakness in US treasury yields would also provide support to the bullions. Escalating trade tension would further increase the flows into ETF’s and increase investment demand. Meanwhile, focus will remain on key economic numbers from US, which could bring further volatility in price.
* Gold price is likely to hold the key support near $2925 and move towards $2960. Unwinding of OI at ATM calls indicates an upward movement. Higher concentration of OI in 2950 call strike could provide some resistance, but a move above $2950 could bring short covering rally. MCX Gold April is expected to hold the support Rs.85,500 and move towards Rs.87,000 level.
* Spot silver is expected rise towards $33.40,as long as it trades above $32.40. An improved manufacturing activity would support its demand outlook. MCX Silver March is expected to rise towards Rs.98,200, as long as it holds above Rs.95,800.
Base Metal Outlook
* Copper prices are expected to hold its ground and move higher amid forecast of improved manufacturing activity in US. Further, sign of a trade deal between US and China would ease tariff concerns. Moreover, softer dollar and demand improvement from China would help the metals to stay firm. Furthermore, narrowing contango between LME cash and 3M forwards indicates tightness in supply.
* MCX Copper February is expected to hold the support at Rs. 860 and rebound towards Rs.875. A positive cross over of 10 and 20 day EMA suggests bullishness in the trend.
* MCX Aluminum Feb is expected to find support near Rs.261 level and move higher towards Rs.268 level. Tightness in the physical market and sanction on Russian imports by European nation would support the metal to stay higher. MCX Zinc Feb is likely to rise towards Rs.274, as long as it stays above 20 day EMA at Rs.269.
Energy Outlook
* NYMEX Crude oil is likely to move towards $74 on short term supply worries. Reduced supplies from Russia and speculation over delay in OPEC+’s production hike would support oil prices to hold its gains above $71 mark. Further, any price cap on Russian oil exports by G7 nations would again trigger supply concerns which might support prices in the near term. Moreover, tighter sanction on Iranian oil exports would also cause immediate supply tightness.
* On the data front, addition of OI has been observed in ATM and OTM put strike, which suggests strong support . On upside $74 would act as key hurdle. MCX Crude oil March is likely to consolidate in the band of Rs.6180 and Rs.6400 in the near term, A move above Rs.6400 it would rise towards Rs.6480.
* MCX Natural gas Feb is expected to move lower towards Rs.340, as long as it trades under Rs.365. Forecast of warmer weather in US after 26 February would bring correction in gas prices.
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