MCX Natural gas September is expected to hold above Rs 272 level and rise towards Rs 285- Rs 288 level - ICICI Direct
Metal’s Outlook
Bullion Outlook
• Spot gold is expected to move in a wide range of $4200 and $4380 per ounce ahead of today’s US Fed policy, where central bank is expected to increase the rates by 25 bps. Traders will also look for guidance on another potential rate hike later this year, with expectations of growing for a move in October or December. Further, strong dollar and higher U.S. Treasury yields would weigh on prices. CME Fed-Watch Tool now signals a 92% probability of a September rate hike following the latest US CPI data. Moreover, growing bets of 25 bps rate hike from BOJ would also weigh on prices. Meanwhile, strong central bank buying and ETF inflows would limit its downside.
• MCX Gold October is expected to slip towards Rs 149,000 as long as it stays under Rs 154,000 level. A move below Rs 149,000 it would weaken towards Rs 147,500.
• MCX Silver December is expected to slip towards Rs 228,000-Rs 230,000 levels as long as it trades below Rs 236,000
Base Metal Outlook
• Copper prices are likely to trade lower on firm dollar and growing bets of a tighter monetary policy from the US Federal Reserve. Furthermore, rising global exchange inventories and escalating geopolitical tensions could hurt the demand outlook. Moreover, further delay on import tariffs on refined copper by US would cool down the premiums and prompt some liquidation. Meanwhile, stronger than expected Chinese industrial production data may prevent sharp downside to the prices.
• MCX Copper September is expected to slip towards Rs 1354 as long as it stays under Rs1374 level. Only a move below Rs 1354 level, it will turn weaker towards Rs1348.
• MCX Aluminum September is expected to hold support above Rs 345 level and rise towards Rs 352. MCX Zinc September is likely to hold above Rs410 and rise towards Rs 420 levels.
Energy Outlook
• Crude oil prices are expected to trade higher amid major supply disruption in the Middle East. A temporary shut down to Saudi-Arabia’s alternative route would hurt global oil supplies. It has also cancelled some scheduled oil shipments. There is no clear timeline for the resumption of operation at key pipe line as Iran-backed Houthi militants renewed attacks on Saudi Arabia this week. Further, supply disruption from Libya would also support oil prices. Moreover, depleting inventory levels in the US would keep prices at elevated levels. US crude oil stocks in SPR have dropped down to 285 million barrels, lowest since November 1982.
• NYMEX crude oil is expected to rise towards $108-$110 per barrel as long as it holds above $100 mark. MCX Crude oil October is expected to rise towards Rs9900-Rs 10,100 as long as it holds above Rs 9300 level.
• MCX Natural gas September is expected to hold above Rs 272 level and rise towards Rs 285- Rs 288 level.
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