MCX Natural gas Feb is expected to rise back towards Rs.280 level as long as it trades above Rs.264 level - ICICI Direct
Bullion Outlook
* Spot Gold is likely to trade with positive bias amid rise in demand for safe haven as US President Donald Trump on weekend ordered widespread tariffs on goods from Mexico, Canada and China, triggering trade war that could dent global economic growth and reignite inflation. US imposed 25% tariffs on Mexican and most Canadian imports and 10% on goods from China, starting Tuesday. In retaliation Canda said it would impose 25% tariffs against $155 billion worth US goods. Mexico also vowed retaliatory tariffs whereas China said it would challenge this move at the WTO and take counter measures. Meanwhile, strong dollar and rise in US Treasury yields may cap sharp upside in prices. Spot gold is likely to rise further towards $2820 level as long as it trades above $2770 level. MCX Gold April is expected to rise back towards Rs.84,000 level as long as it stays above Rs.82,700 level.
* Spot Silver is likely to rise further towards $31.80 level as long as it holds the support near $30.70. MCX Silver March is expected to rise further towards Rs.94,500 level as long as it trades above Rs.92,000 level
Base Metal Outlook
* Copper prices are expected to trade with negative bias on weak economic data from China and on fears that US President Donald Trump tariffs could disrupt global commodity trade and ignite trade war, hurting global economic growth and denting demand for industrial metal. Further, investors fear that Donald Trump policies like lower taxes and overhaul of immigration will reignite inflation, leaving more room for Fed to keep rates on hold for longer duration. Additionally, expectation of disappointing economic data from US will hurt prices. US ISM Manufacturing PMI is likely to show that activity in sector continued to remain in contraction phase.
* MCX Copper February is expected to slip towards Rs.820 level as long as it stays below Rs.835 level. A break below Rs.820 level copper prices may slip further towards Rs.815 level
* MCX Aluminum Feb is expected to correct further till Rs.247 level as long as it trades below Rs.252 level. MCX Zinc Feb is likely to slip further till Rs.258 level as long as it stays below Rs.265 level
Energy Outlook
* Crude oil is expected to trade with positive bias as US President Donald Trump imposed tariffs on Canada, Mexico and China over the weekend, raising fears of disruption of crude supply from 2 of US biggest suppliers. White house official said Energy products from Canada will have only a 10% duty, but Mexican energy imports will be charged the full 25%. US imports some 4 mbpd of Canadian oil, 70% of which is processed by refiners in the Midwest and over 450,000 bpd of Mexican oil, mainly for refiners concentrated around the US Gulf Coast. Moreover, market will keep an close eye on OPEC+ ministerial meeting scheduled today.
* NYMEX Crude oil is likely to rise back towards $75.00 level as long as its stays above $73.0 level. MCX Crude oil Feb is likely to rise back towards Rs.6450 level as long as it stays above Rs.6250 level.
* MCX Natural gas Feb is expected to rise back towards Rs.280 level as long as it trades above Rs.264 level
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