MCX Silver July is expected to rise towards Rs 110,600 level, as long as it holds above Rs 106,800 level - ICICI Direct
Metal’s Outlook
Bullion Outlook
• Spot Gold is expected to hold the support near $3360 and move towards $3430 amid safe haven buying. Escalating geopolitical tension between Israel and Iran would support the bullions to hold its ground. Further, US President Donald Trump demanded Iran’s “unconditional surrender” and directly threatened its Supreme Leader . All focus will remain on developments on Iran and US. Furthermore, investors will focus on Today’s FOMC policy and economic projections from the US Fed.
• Spot gold is expected to remain volatile and move in the band of $3360 and $3430. Only a move below $3360 it would turn weaker. MCX Gold Aug is expected to move in the band of Rs 98,500 and Rs 100,500 level. A move below Rs 98,500 would bring further correction in price towards Rs 97,500 mark
• MCX Silver July is expected to rise towards Rs 110,600 level, as long as it holds above Rs 106,800 level.
Base Metal Outlook
• Copper prices are likely to remain range bound ahead of key central bank policies and ongoing geopolitical uncertainty. The US federal Reserve is widely expected to hold the rates steady but focus will remain on forward guidance which could shape expectation for the rest of the year. Meanwhile, sluggish industrial demand from China would likely to restrict its upside. Additionally, drop in Yangshan Copper premium to its lowest over a month indicates prices to remain under pressure. On the other hand, depleting LME inventories and increasing refined copper demand from US could provide support to prices.
• MCX Copper June is expected to move in the band of Rs 872 and ?884 level. A move above Rs 884, would rise towards ?890 level
• MCX Aluminum June is expected to hold support near Rs 241 and extend its rebound towards Rs 248 level. MCX Zinc June is likely to face resistance near Rs 254 level and move in the range of Rs 250 and Rs 254 level. A move above Rs 254, would open the doors towards Rs 257.
Energy Outlook
Crude oil is likely to remain volatile and trade with positive bias amid ongoing geopolitical tenson in the Middle East. Growing speculation that US could join Israel’s attack on Iran would hurt global oil supplies. Meanwhile, the API inventory data showed a sharp drop last week by almost 10 million barrels per day. Meanwhile, investors will await EIA’s weekly inventory data. More importantly , the US Fed rate decision will also be keenly awaited.
• On the data front , strong put base at $65 strike suggest good support. On the upside key hurdle is at $75 mark. MCX Crude oil July is likely to remain in the band of Rs 6050 and Rs 6350 level. Only above Rs 6350, it would rise towards Rs 6500.
• MCX Natural gas June is expected to move higher towards Rs 345 as long as it holds above Rs 320 mark. Forecast of hotter weather in US would increase cooling demand.
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