Spot Gold may hold gains and trade positive amid safe haven buying support-ICICI Direct
Metal’s Outlook
Bullion Outlook
* Spot Gold is likely to hold its gains and move with positive bias on safe haven buying. Further, increasing probability of Fed interest rate cut would also support the bullions to make new highs. US-China trade tension and political uncertainty in France would increase safe haven bids. Further, economic uncertainty and delay in release of US economic data would bring more investors towards the safe asset class. Recent dovish comments from the US Fed chair Jerome Powell has increased the 25-bps rate cut probability in Oct to 96% and December to 94%.
* Spot gold is likely to move higher towards $4200, as long as it holds above $4130. Above $4200 it would rise towards $4250. MCX Gold December is expected to hold the key support near Rs.124,800 level and move higher towards Rs.128,000 level.
* MCX Silver Dec is expected to hold support near Rs.156,000 level and rise towards Rs.164,500 level.
Base Metal Outlook
* Copper prices are expected to find its ground and regain its strength amid growing bets of Fed interest rate cut and supply concerns. Further a softer dollar and better-than-expected trade data from China would also help the metal to counter the concerns over US tariffs on Chinese goods. Dovish comments from the US Fed chair Jerome Powell and other Fed members have increased the probability of 2 rate cuts in this year. Meanwhile, uncertainty over US-China trade negotiations could restrict the upside in the metal. Meanwhile, investors will eye on key economic numbers from China and speeches from the Fed members to get more clarity.
* MCX Copper Oct is expected to hold support near Rs.980 and move back towards Rs.1010 level.
* MCX Aluminum Oct is expected to rise towards Rs.267 level as long as it stays above Rs.261 level.
* MCX Zinc Oct looks to rise towards Rs.294 as long as it holds key support at Rs.289.
Energy Outlook
* Crude oil is likely to remain under pressure amid improved supply from OPEC+ nations. The International Energy Agency has increased its global oil surplus to 4 million barrels per day in the next year. Further, renewed US-China trade jitters would also hurt demand growth. Moreover, easing geopolitical tension in the Middle East and extension to US Government shutdown would check the upside in oil prices. In addition to that, expectation of rising US inventory levels could also weigh on oil prices. On the other hand, prices could get support due to soft dollar and increasing prospects of lower interest rate from the US federal reserve.
* MCX Crude oil Oct is likely to slip towards Rs.5100, as long as it trades under Rs.5350 level. NYMEX crude oil is likely to move in the band of $58 and $60 per barrel. A move below $58 it would slide towards $57 mark.
* NYMEX Natural Gas is expected to trade lower amid mild US weather forecast. MCX Natural gas Oct is expected to slip towards Rs.265 level as long as it trades under Rs.280 level.
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