MCX Silver July is expected to dip towards Rs 234,000 - Rs 230,500 level as long as it stays below Rs 244,000 level - ICICI Direct
Metal’s Outlook
Bullion Outlook
• Spot Gold is likely to remain under pressure amid strong. Further, prices may dip as US Federal Reserve decision to hold interest rate steady and signaling 1 rate hike by the end of the year may outweigh positive impact of US-Iran peace deal. Half of the FOMC members indicated that it may be necessary to raise rates this year, signaling growing concerns about inflation above central banks target. Additionally, stronger than expected economic data from US signal resilience in the economy adding to rate hike expectations. According to CME FedWatch tool markets are now pricing in an 86% chance of a U.S. rate hike in December. This is higher than the 61% chance seen before the Fed's policy statement
• MCX Gold Aug is expected to slip further towards Rs147,500- Rs 146,500 level as long as it stays below Rs 151,500 level
• MCX Silver July is expected to dip towards Rs 234,000- Rs 230,500 level as long as it stays below Rs 244,000 level.
Base Metal Outlook
• Copper prices are expected to trade with negative bias amid strong dollar. Further, prices may slip on concerns that tighter monetary policy in major economies may push borrowing cost higher clouding outlook for global economic growth and industrial metal demands. Further, ease in supply concerns after Rio Tinto resumed exports of copper concentrate from its giant Oyu Tolgoi mine in Mongolia will add downside pressure. Meanwhile, sharp fall in prices may be cushioned on ongoing concerns about US import tariffs and persistent decline in inventory at LME registered warehouses.
• MCX Copper June is expected to slip towards Rs 1305 level as long as it stays below Rs 1335 level. A break below Rs 1305 level prices may be pushed towards Rs 1300- Rs1295 level
• MCX Aluminum June is expected to slip towards Rs 353- Rs 350 level as long as its stays below Rs 362 level. MCX Zinc June is likely to face stiff resistance near Rs 373 level and slip towards Rs 365 - Rs 362 level.
Energy Outlook
• NYMEX Crude oil is likely to trade with negative bias on strong dollar following hawkish US Federal Reserve stance. Further, prices may dip on expectation of improvement in supply from Middle East as US and Iran signed an interim agreement that could end the war, reopen Strait of Hormuz and waive of sanctions on Iranian oil. Iranian oil reaching markets would weigh on prices as it will significantly increase global energy supply. U.S. said it lifted its blockade on Iran as the interim deal took effect. Additionally, as per reports ships carrying stranded oil began making their way out of the waterway. Meanwhile, sharp downside may be cushioned as Israel continued its attack on Hezbollah in Lebanon, raising doubts about durability of peace deal. Moreover, investors will remain cautious as full recovery in Gulf oil flows will take time, as countries will need to fix war-inflicted damages. MCX Crude oil July is likely to slip towards Rs 6900 - Rs 6800 level as long as it stays below Rs 7500
• MCX Natural gas July is expected to rise towards Rs 315 - Rs 320 level as long as it stays above Rs 298 level.
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