MCX Natural gas July is expected to hold above Rs278 and rise towards Rs290 - ICICI Direct
MCX Gold vs. Silver
Bullion Outlook
• Spot gold is likely to face hurdle near $4100 and move back towards $4000 on strong dollar and higher global treasury yields. Meanwhile, higher oil prices and raising inflation concerns could lead to tighter monetary policy and weigh on prices. For the first time, the CME FedWatch tool shows September rate hike bets surging beyond 80%, accompanied by a greater than 50% chance of a subsequent 25 bps increase in December. Escalating Middle East tensions and concerns over widening of the conflict in the region would push oil prices higher, lifting inflation risk. Meanwhile, central bank buying and safe-haven demand could limit its downside
• MCX Gold Aug is expected to slip towards Rs141,000 level as-long-as it trades below Rs 145,000 level. Only below Rs141,000, it would slip towards Rs140,000.
• MCX Silver September is expected to face hurdle near Rs224,500 and slip towards Rs217,000 and Rs215,000 levels.
Base Metal Outlook
• Copper prices are expected to trade lower amid stronger dollar and global risk-off sentiment driven by escalating US-Iran geopolitical tensions. Furthermore, growing prospects of restrictive Federal Reserve monetary policy are likely to weigh on copper prices. However, a jump in imported copper premiums to a 14-month high of $115 per ton will limit the downside. Additionally, depleting inventories on the LME and SHFE with SHFE stocks hitting 10-month lows and triggering a backwardation structure will provide some price support.
• MCX Copper July is expected to slip towards Rs1305 as- long- as it trades under Rs1330 level.
• MCX Aluminum July is expected to move higher towards Rs347- Rs348, aslong- as it stays above Rs340. MCX Zinc July is likely to slip towards Rs376 as- long- as it trades under Rs385-Rs386 level.
Energy Outlook
• NYMEX crude is likely to remain volatile and move higher towards $95 as long as it holds above $87. Recent attacks on Saudi oil tankers in the Red Sea by Iran-backed Houthi militants have heightened concerns regarding broader supply disruptions across key shipping routes. Furthermore, the U.S. has extended its military strikes on Iran into a 13th consecutive day, showing no signs of near-term negotiations to resolve the conflict. Meanwhile, sluggish Chinese import figures and expectations of tighter U.S. monetary policy could cap further price gains
• The oil market structure remains in steep backwardation, with nearmonth prices commanding a $4.5 per barrel premium over later-dated contracts, pointing to severely tighter prompt supplies and geopolitical supply risks. MCX Crude oil August is likely to move towards Rs9200 aslong-as it holds above Rs8600.
• MCX Natural gas July is expected to hold above Rs278 and rise towards Rs290.
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