Spot silver, is expected consolidate in the band of $31.90 and $32.40 - ICICI Direct
Metal’s Outlook
Bullion Outlook
* Gold is expected to hold the key support near $2877 and move higher towards $2910 amid increasing safe haven demand. Uncertainty over the reciprocal tariffs on trading partner countries is likely to hurt sentiments and reinforce bullion’s appeal as safe haven asset. Meanwhile, investors will watch the comments from Fed members to get more clarity on timing of interest rate cut.
* On the daily charts, spot gold has formed a bearish engulfing pattern, which could restrict its upside. Further, addition of OI in OTM call strikes near 2925 suggest prices to face resistance near $2925. MCX Gold April is expected to consolidate in the band of Rs.84,600 and Rs.85,500 level. Only above Rs.85,500, it would open the doors towards Rs.86,000
* Spot silver, is expected consolidate in the band of $31.90 and $32.40. A move below $31.90 it would turn weaker. MCX Silver March is expected trade in the band of Rs.94,500 and Rs.96,600. Below Rs.94,500, it would turn weaker.
Base Metal Outlook
* Copper prices are expected to trade lower on easing potential tariffs on Copper imports. The LME Cash to three month spread has flipped from a backwardation to contango indicating easing supply concerns or tightness in the physical market. Meanwhile, depleting inventory levels in LME and a sharp jump in CFTC net longs could limit its downside. Additionally, strong imports from China and pick up in industrial activity would also support prices.
* MCX Copper February is expected to decline towards Rs. 850, as long as it trades under Rs.872. A move below Rs.850, it would turn weaker.
* MCX Aluminum Feb is expected to find support near 10 day EMA Rs.256 level and move higher towards Rs.260 level. Tightness in the physical market and depleting inventories would support the metal to stay higher. MCX Zinc Feb is hovering near key support at Rs.265, a move below would weaken it towards Rs.262 level. On the upside Rs.270 would remain as strong resistance.
Energy Outlook
* NYMEX Crude oil is expected to hold the key support near $70 and move in a tight range on reports that OPEC could delay further production hikes. Meanwhile, focus will remain on the peace negotiation between Russia and Ukraine. The spread between near and far month has almost reduced to zero from $1.5 per barrel a month ago. This shift from backwardation to contango reflected less demand.
* On the data front, continuous drop in OI since last 5 weeks indicates liquidation in oil futures. More over, unwinding of OI in ATM and OTM put strike indicates weakness in price. On upside $73 would act as key hurdle. MCX Crude oil March is likely to consolidate in the band of Rs.6100 and ?6300 in the near term, Only close below Rs.6100 it would turn weaker.
* MCX Natural gas Feb is expected to hold the 10 day EMA support at Rs.306, if held then it would rebound towards Rs.320. Forecast of colder weather in US and rising export demand would help prices to trade firm.
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