MCX Silver December is expected to slip towards Rs228,000-Rs230,000 levels as long as it trades below Rs236,000 - ICICI Direct
Metal’s Outlook
Bullion Outlook
• Spot gold is expected to trade lower toward $4250 per ounce amid strong dollar and higher U.S. Treasury yields. Furthermore, elevated oil prices has strengthened the prospects of a tighter monetary policy from US Federal Reserve this week. The CME FedWatch Tool now signals a 90% probability of a September rate hike following the latest US CPI data. The US 10-year treasury yields hit 5% amid fiscal and inflation concerns which would add further pressure on bullions. 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 Rs149,000 as long as it stays under Rs154,000 level. A move below Rs149,000 it would weaken towards Rs147,500.
• MCX Silver December is expected to slip towards Rs228,000-Rs230,000 levels as long as it trades below Rs236,000.
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, escalating geopolitical tensions could hurt the demand outlook, weighing on industrial metals and driving prices down. Moreover, further delay on import tariffs on refined copper by US amid higher manufacturing cost would ease the price premiums between Comex and LME copper. Meanwhile, ongoing supply worries and low warehouse inventories on both the London Metal Exchange and the Shanghai Futures Exchange should limit the downside.
• MCX Copper September is expected to slip towards Rs1354 as long as it stays under Rs1370 level. Only a move below Rs1354 level, it will turn weaker towards Rs1345.
• MCX Aluminum September is expected to hold support above Rs345 level and rise towards Rs352. MCX Zinc September is likely to correct towards Rs410 as long as it trades under Rs420 levels.
Energy Outlook
• Crude oil prices are expected to trade higher amid heightened uncertainty over global oil supply. A temporary shut down to SaudiArabia’s alternative route would hurt global oil supplies. Meanwhile, Iran reported that a supertanker exploded after striking mines in a restricted zone of the Strait of Hormuz, while reiterating that it will not negotiate with the U.S. until its demands are met. Additionally, oil prices remain elevated as Ukrainian President Zelensky has yet to confirm a halt on strikes against Russian energy infrastructure, despite U.S. President Trump’s claims that Moscow and Kyiv had already agreed to a mutual suspension.
• NYMEX crude oil is expected to rise towards $105-$108 per barrel as long as it holds above $98 mark. MCX Crude oil October is expected to rise towards Rs9800-Rs9,900 as long as it holds above Rs9000 level.
• MCX Natural gas September is expected to hold above Rs270 level and rise towards Rs280- Rs285 level.
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