MCX Natural gas September is expected to hold above Rs264 level and rebound towards Rs275 level - ICICI Direct
Metal’s Outlook
Bullion Outlook
• Spot gold is expected to trade lower toward $4280 per ounce amid strong dollar and higher U.S. Treasury yields. Furthermore, growing expectations of rising inflation could reinforce expectations for a Federal Reserve rate hike next week. The CME FedWatch Tool now signals a 70% probability of a September rate hike following the PPI data. Prices will also face pressure as surging crude oil prices, driven by the escalating U.S.–Iran conflict, fuel concerns over rising inflation. Meanwhile, strong central bank buying and ETF inflows would limit its downside. Today, focus will remain on US consumer price index which could bring further volatility.
• MCX Gold October is expected to slip towards Rs150,000 as long as it stays under Rs154,000 level. A move below Rs150,000 it would weaken towards Rs149,000.
• MCX Silver December is expected to slip towards Rs230,000-Rs232,000 levels as long as it trades below Rs239,000.
Base Metal Outlook
• Copper prices are likely to trade lower on firm dollar and growing bets of a tighter monetary policy from US Federal Reserve. Furthermore, escalating geopolitical tensions could hurt the demand outlook, weighing on industrial metals and driving prices down. Meanwhile, ongoing supply worries and low warehouse inventories on both the London Metal Exchange (LME) and the Shanghai Futures Exchange (SHFE) would limit the downside. Prices will also find crucial support from anticipated strong demand in China ahead of the peak manufacturing season.
• MCX Copper September is expected to slip towards Rs1360 as long as it stays under Rs1390 level. Only a move below Rs1360 level, it will turn weaker towards Rs 1350.
• MCX Aluminum September is expected to hold support above Rs348 level and rise towards Rs355. MCX Zinc September is likely to correct towards Rs410 as long as it trades under Rs422 levels.
Energy Outlook
• Crude oil prices are expected to trade higher amid escalating military conflict in the Middle East and growing fears of severe disruptions to global energy supplies and vital shipping routes. Iran-backed Houthi militants seized the strategic Yemeni port city of Mokha, expanding their control near the Bab al-Mandeb strait, a chokepoint for energy exports via Red Sea. The advance adds pressure on an alternative route for Saudi crude shipments. Further, declining oil production in Saudi Arabia to its lowest since 1990 has intensified supply concerns. A steep backwardation structure in oil indicates supply risk as well as tight inventories, which would keep prices elevated.
• NYMEX crude oil is expected to rise towards $105-$108 per barrel as long as it holds above $99 mark. MCX Crude oil September is expected to rise towards Rs9900-Rs10,000 as long as it holds above Rs9200 level.
• MCX Natural gas September is expected to hold above Rs264 level and rebound towards Rs275 level.
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