Spot Gold is likely to remain under pressure on strong dollar and higher global treasury yield - ICICI Direct
Bullion Outlook
* Spot Gold is likely to remain under pressure on strong dollar and higher global treasury yields. Improved risk sentiments after the trade deals would ease safe haven buying in the precious metal. Meanwhile, focus will shift towards trade agreement between US and China which could again bring volatility in prices. Moreover, investors will remain cautious ahead of this week’s key FOMC policy. As of now the probability of no rate cut is almost above 90%. So, investors will focus on the Fed chairs comments to get more clarity on next rate cut.
* 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 face strong resistance near RS.99,100 level and move back towards RS.98,000 level.
* MCX Silver Sep is expected to slip towards RS.112,400, as long as it trades under RS.114,500 level. Only below RS.112,400, 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 which type of Copper products will be applicable for tariffs. Meanwhile, 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.902 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 the key support near $65 and move higher on improved risk sentiments and renewed concerns of tighter global oil supplies. On the supply side, tightening conditions in the global diesel market amid sanction on Russian oil would support prices to stay higher. 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 USChina 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 consolidate in the band of RS.5600 level and RS.5840 level.
* Natural gas is likely to trade lower on forecasts for cooler US weather. MCX Natural gas August future is expected to remain under pressure as long as it stays under RS.272.
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