Spot gold is likely to slip towards $3320 level as long as it stays below $3375 level - ICICI Direct
Metal’s Outlook
Bullion Outlook
* Spot Gold is likely to slip back towards $3320 level on expectation of recovery in dollar and U.S treasury yields. Further, better than expected economic data from U.S signals resilience in in the economy, giving Fed cover to delay cutting interest rates. Maybe statement from Federal Reserve Governor Christopher Waller was dovish but most officials who had spoken publicly signaled a desire to hold rates in upcoming meeting. Moreover, as per media report U.S is pushing for minimum tariff of 15% to 20% in any deal with EU, signaling Trump administration trying to exceeds 10% reciprocal tariff even if deal is reached, risk of higher inflation. Meanwhile, demand for safe haven may increase on escalating geopolitical tension in Middle East and uncertainty over U.S trade policies
* Spot gold is likely to slip towards $3320 level as long as it stays below $3375 level. MCX Gold Aug is expected to slip back towards Rs.97,500 level as long as it stays below Rs.98,500 level
* MCX Silver Sep is expected to slip towards Rs.112,000 level as long as it trades below Rs.114,000 level.
Base Metal Outlook
* Copper prices are expected to trade with a negative bias on expectation that dollar may regain its strength and fears of escalating trade tension between U.S and its major trading partners. Investors are worried that tit for tat approach increased the risk of broader global trade war, which may have adverse effect on economic growth denting demand for industrial metal. Investors will remain cautious ahead of 1 st August deadline when many trading partners will face higher trade levies and a list of the copper products to which the levy would apply. Additionally, prices may slip further amid rise in inventories at LME registered warehouses.
* MCX Copper July is expected to slip back towards Rs.884 level as long as it stays below Rs.895 level. On contrary, a break above Rs.895 prices may rally further towards Rs.900 level
* MCX Aluminum July is expected to rise further towards Rs.255 level as long as it stays above Rs.249 level. MCX Zinc July is likely to move north towards Rs.268 level as long as it stays above Rs.261 level.
Energy Outlook
* Crude oil is likely to trade with negative bias and slip further towards $65 level on expectation of recovery in dollar, weak global market sentiments and rising output from Middle East producers. Further, market participants fears that higher trade tariffs and higher borrowing cost could slowdown global economic growth and in turn dampen demand for oil. Moreover, Iran is due to hold nuclear talks in Istanbul with Britain, France and Germany on Friday, any positive outcome will put downside pressure on prices. Meanwhile, sharp fall may be cushioned on supply concerns as European Union approved 18th package of sanctions against Russia over the conflict in Ukraine
* MCX Crude oil Aug is likely to slip back towards Rs.5550 level as long as it stays below Rs.5800 level.
* MCX Natural gas July is expected to dip towards Rs.290 level as long as it stays below Rs.312 level.
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