Metals and Energy Weekly Report - Religare Broking Ltd
GOLD
Gold prices eased from record highs of late following a temporary reprieve from the US, on select Chinese-made tech products, but the fundamentals are unchanged. Trump administration's erratic trade maneuvers have rattled the market confidence in recent weeks, pushing the investors toward the safe-haven asset especially gold. Rising prospects of FED rate cuts also keeps the tone positive for gold
Technical Outlook
Gold looks overbought and a period of consolidation may be warranted, though expectations for the precious metal to continue to continue to rally in the longer-term remain intact. On MCX the corrective may be seen towards the 92000 level and subject to consolidation around this level, look forward to resume buying.
SILVER
Silver moved above $32.00 last week as traders focused on the strong performance of gold markets in addition to recovering copper market. The global participants shall look forward to cues from the FOMC speeches in addition to the upcoming Q1 GDP and the industrial production numbers of China.
Technical Outlook
MCX silver staged a handsome recovery after testing low of 87678. The charts appear positive for the week with a higher chance of prices moving towards the 98000 mark. As long as the daily closing remains above the 92000 support on a closing basis, maintain buy on every correction.
Crude oil
Crude oil has found some respite for the bulls of late. The worsening trade relations and fragile U.S. production economics are all weighing on sentiment. On the other hand the Iranian sanction possibility and mounting geo-political have raised the supply threats. The renewed Iran sanctions could cut over 1M barrels/ day therefore fresh updates will be important on this front and as for now the view appears sideways.
Technical Outlook
MCX crude has witnessed a sharp recovery after testing 4798. The market was strongly oversold therefore justifying this price action. Short term gains can continue moving forward, but we doubt prices sustaining above the 5550 mark this week. Failure to trade above this level on a closing basis can force crude oil test 4950-5000 in the coming days.
Natural gas
Natural gas finished the week on a negative mood. The spring season has set in and ultimately the likelihood of slower demand for the heating oil has increased. Additionally the economic turmoil going in the US may adversely impact the electricity demand as well. Having said this, the downside will be under check for some time as the reserves have gone down in the recent months.
Technical Outlook
The near-term trend remains bearish, although the market seems to form a temporary base around the 270-275 level on the MCX. The chances of futures sustaining above the 315-320 appears quite less as for now, therefore maintain sell on every rally.
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