Spot gold is to expected to hold its ground and move higher amid safe haven buying - ICICI Direct
Metal’s Outlook
Bullion Outlook
* Spot gold is to expected to hold its ground and move higher amid safe haven buying. Tension between US and Iran remained at a critical point after President Donald Trump set a 10–15-day deadline for nuclear deal talks, while the US deployed its largest military force in the Middle East since the 2003 Iraq invasion. Meanwhile, a stronger dollar and hawkish comments from the US Federal member Miran lowered the chances of rate cuts. Meanwhile, investors are awaiting the US Core PCE Price Index and GDP data which will influence the Federal reserve’s interest rate trajectory. A rise in inflation number would strengthen the dollar and limit upside in bullion price.
* Spot gold is likely to rise towards $5100 as long as it holds above $4900. MCX Gold April is expected to move higher towards Rs.157,000 as long as it trades above Rs.152,000.
* MCX Silver March is expected to move in the range of Rs.238,000 and Rs.248,500. Only a move above Rs.248,500 it would rise towards Rs.252,000
Base Metal Outlook
* Copper prices are expected to trade with negative bias amid firm dollar and signs of weak demand in China amid Lunar New Year holidays. Additionally, persistent rise in inventories at LME registered warehouses would hurt prices. Furthermore, Yangshan copper premium, which reflects Chinese appetite for imported copper, was at $33 a ton, still too low to indicate strong demand. Investors are cautious ahead of today's US Core PCE inflation report, which will signal the Federal Reserve's next interest rate.
* MCX Copper Feb is expected to slip towards Rs.1145 level as long as it stays below Rs.1185 level. A break below Rs.1145 level, prices may be pushed towards Rs.1130- Rs.1125 level
* MCX Aluminum Feb is expected to slip towards Rs.302 level as long as its stays below Rs.312 level. MCX Zinc Feb is likely to face stiff resistance near Rs.328 level and slip further towards Rs.318 level
Energy Outlook
* NYMEX Crude oil is expected to trade higher amid ongoing US-Iran tension that could lead to supply disruptions. U.S. President Trump has issued a 10–15-day deadline for Iran to reach a nuclear agreement. Fear over Imminent US-Iran conflict would likely to bring risk premiums to oil prices. A massive U.S. military buildup has raised fears of potential strikes. Investors are also pricing in potential disruptions to the Strait of Hormuz, a critical chokepoint through which 20% of the world's oil flows.
* On the data front, closer of OI in ATM and OTM call strike indicates prices to move higher. MCX Crude oil March is likely to rise towards 6100 mark, as long as it trades above 5900. Only close above 6100 it would turn bullish and open the doors towards 6300.
* MCX Natural gas February future is expected to move in the band of 268 and 284. Only a move above 284 it would turn bullish towards 290..
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