NYMEX Crude oil is expected to hold its ground near $71 mark and rebound towards $74 on sign of tighter supplies - ICICI Direct
Bullion Outlook
* Gold is expected to hold above $2890 and move higher towards $2950 on safe haven demand. Fresh levies are prompting investors to go after the safer asset class. Further, increasing investment demand in China would also support the bullions to scale new highs. Meanwhile, inflation concerns and would also attract funds to go long in the metal to hedge against inflation. Meanwhile, investors will focus on the comments from Fed Chair Powell’s speech to get more clarity on timing of rate cut.
* On the data from, unwinding of OI in 2900 call strike indicates more upside in the yellow metal. MCX Gold April is expected to hold the support at Rs.85,000 level and move higher towards Rs.86,800 level. Only a move below Rs.85,000 level prices may slip towards Rs.84,500 level.
* MCX Silver March is expected to hold the key support at Rs.94,500 and move higher towards Rs.96,600. Only above Rs.96,600 level it would turn bullish and open the doors towards Rs.98,000.
Base Metal Outlook
* Copper prices are likely to hold its gains amid tightness in supply from Chile. Further, relatively tight spot market amid improved demand from China after New year holiday would also support prices. Increasing premium of US Comex copper futures over those traded in LME surged to $920 per MT from $558 on Friday indicates higher demand in US. Meanwhile , tariff concerns from US would bring further uncertainty in the metal space.
* MCX Copper February has breached the multiple resistance at Rs. 860, which would act as key support. So as long as Rs.860 holds support its is expected to rise towards Rs.872.
* MCX Aluminum Feb is expected to rise towards Rs.264 level as long as it trades above Rs.258 level. MCX Zinc Feb is likely to hold Rs.268 level and move higher towards Rs.274 level.
Energy Outlook
* NYMEX Crude oil is expected to hold its ground near $71 mark and rebound towards $74 on sign of tighter supplies. Russian oil production fell below the OPEC+ quota in January easing concerns of an oversupply. Output fell below 9.0 mb/d in January. Further, higher prices by Middle East supplier would also provide support to oil prices. Meanwhile, concerns over new trade war between US and China would increase demand uncertainty.
* On the data front, strong put base near the 70 put strike would act as major support. Further, unwinding of OI in ATM call strikes indicates price recovery in oil prices. On the put side fresh addition of has been observed at ATM and OTM put strikes. MCX Crude oil Feb is likely to hold the support at Rs.6200 and move higher towards Rs.6430.
* MCX Natural gas Feb is expected to hold its ground and move towards Rs.310 as long as it holds above Rs.292. Forecast of colder weather in US and rising export demand would help prices to trade firm.
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