Spot Gold is likely to consolidate in the band of $3300 and $3350 ahead of the FOMC meeting tonight - ICICI Direct
Bullion Outlook
* Spot Gold is likely to consolidate in the band of $3300 and $3350 ahead of the FOMC meeting tonight. Higher bets of no rate cut in July would support the dollar and restrict any major upside in the bullions. Meanwhile, investors will eye on comments from the Fed chair to get clarity on timing of next rate cut. Any sign of two rate cuts in this year would support the bullions. However, if the Fed chair’s speech turned out to be hawkish then bullions will feel the heat and remain under pressure. Additionally, investors will also focus on geopolitical tension and other key economic numbers from US to get more clarity
* On the data front, a strong call base at 3400 would act as key hurdle for prices. On the downside 3250 put strike has higher OI which could provide support. MCX Gold October is expected to consolidate in between RS.98,400 and RS.99,750 level. A move above ?99,750 would turn bullish.
* MCX Silver Sep is expected to rise towards RS.114,400, as long as it trades above RS.112,700 level. Only below RS.112,700, it would turn bearish.
Base Metal Outlook
* Copper prices are expected to move in a tight range ahead of 1 st August deadline on 50% tariff on copper imports to US. It is still not clear that a types Copper products will be applicable for tariffs. Meanwhile, hopes of an extension of US and China trade truce would provide some support to prices. On the other hand, Chile world’s biggest copper producer is seeking relaxation from 50% US tariff on copper. Any trade deal between Chile and US could ease the current demand surge and restrict its upside. On the inventory front, LME copper stocks continued to see addition, which might restrict its upside.
* MCX Copper August is expected to consolidate in the band of RS.889 and RS.905 level. A break below RS.889 level prices may turn weak towards RS.880 level
* MCX Aluminum July is expected to face resistance near RS.257 level and correct towards RS.253 level. MCX Zinc July is likely to move north towards RS.270 level as long as it stays above RS.265 level.
Energy Outlook
* Crude oil is likely to hold its gains and rise towards $70 per barrel on potential supply disruption. US President has given a 10-day deadline to Russia for a satisfactory resolution to Ukraine conflict. Further, threat of secondary sanction on countries purchasing Russian crude assets would also bring high volatility in price. On the other hand, growing prospects of higher production from OPEC+ would restrict any major up move in oil prices. Meanwhile, investors will eye on US-China trade talks and FOMC meeting outcome to get more clarity on price trend.
* On the data front, 60 put strike has highest OI concentration which would act as key support. On the upside $70 call strike has higher OI concentration, which would likely to act as immediate hurdle. MCX Crude oil Aug is likely to rise towards RS.6150 level, as long as it holds above RS.5840 level.
* MCX Natural gas August future is expected to hold support at RS.265 and rebound towards RS.280.
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