MCX Zinc March is likely to face hurdle near Rs328 level and move lower towards Rs321 level - ICICI Direct
Metal’s Outlook
Bullion Outlook
• Spot gold is expected to face hurdle and move lower towards $5100 amid strong dollar and rising US treasury yields. Growing prospects of rising inflation numbers due to higher oil prices has reduced chances of two rate cuts by the US Federal Reserve. As per the CME Fed watch tool, the rate reduction probability has reduced to only one later this year. Meanwhile, escalating geopolitical tension in the Middle east would increase safe haven appeal. Moreover, strong central bank buying and ETF inflows would provide support to prices.
• Spot gold is expected to face hurdle near $5230 and move lower towards $5100. MCX Gold April is expected to dip towards Rs160,000 as long as it stays under Rs163,500.
• International Spot silver is likely to move in the band of $82 and $88. MCX Silver May is expected to move towards Rs263,000 as long as it stays under Rs274,000. Only a move below Rs263,000, it would slip towards Rs259,000.
Base Metal Outlook
• Copper prices are expected to remain under pressure amid strong dollar and rising inventory levels in major exchanges. Further, ongoing geopolitical uncertainties in the Middle east would also hurt demand outlook. Meanwhile, demand improvement from China after the New year holiday would limit its downside. Moreover, workers at Glencore’s Australian copper refinery threatened to strike after failing to reach an agreement in a pay dispute could limit its downside. In the near term MCX Copper March is projected to move in the broad range of Rs 1,190 and Rs1,210 with a negative bias.
• MCX Aluminum March is expected to hold above Rs 338 and rise towards Rs 350 level. Prices are expected to remain higher due to supply disruption from the Middle east region.
• MCX Zinc March is likely to face hurdle near Rs328 level and move lower towards Rs321 level.
Energy Outlook
• NYMEX crude oil is hovering near $93 per barrel and likely to open with a 7% gap up opening in MCX. Oil prices are likely to remain volatile amid uncertainty over oil supplies via Strait of Hormuz and conflict in the Middle east. Major supply disruption from Middle eastern producers would hurt global supplies after the recent attacks on oil storage and refinery facilities in the region. In addition to that, no sign of de-escalation and threat from Iran to not to release a single liter of oil via Strait of Hormuz would keep prices at elevated levels. NYMEX crude is likely to move towards $98, as long as it holds above $85.
• MCX Crude oil March is likely to move in a broader range of Rs7900 and Rs8900. A move above Rs8900 it would rise towards Rs 9300
• MCX Natural gas March future is expected to rise towards Rs 310 as long as it trades above Rs 280.
Please refer disclaimer at https://secure.icicidirect.com/Content/StaticData/Disclaimer.html
SEBI Registration number INZ000183631
