Commodity outlook: Commodities trade with losses, expect base metals to be choppy
Here is a run through of commodity expectations by SMC Global for the day.
Commodity Summary MCX
Initial optimism over partial deal between US-China has faded amid lack of details and Beijing’s push for rollback in tariffs before China can feasibly agree to buy as much as $50 billion of American agriculture products that President Donald Trump claims are part of an initial deal.
Aluminium and copper prices may come under pressure amid recent rebound in stocks at LME along with worries over weakening demand and increasing supply, Kotak Securities said. The downside, especially in base metals, may however be capped amid weakness in the US Dollar Index, it said in a note.
The brokerage expects crude to remain rangebound to negative ahead of EIA inventory report as API report has fueled expectations of a sharp buildup in stocks.
Below are the expectations of SMC Global for the day:
Bullion: Bullion counter may trade sideways. Gold can test Rs 38,250 while taking support near Rs 37,900 and silver can test Rs 45,500 while taking support near Rs 44,800.
Base metals: Base metals may trade with a negative bias. Zinc can trade in range, facing resistance near Rs 189 while taking support near Rs 184. Lead may trade sideways as it can test Rs 158 while taking support near Rs 154. Henan Yuguang Gold and Lead, China’s largest lead producer, plans to set up a lead-acid battery production line as part of a downstream expansion. Nickel may also trade weakly as it can test Rs 1,170 while facing resistance near Rs 1,220. Aluminum may test Rs 136 while taking support near Rs 132.
Energy: Crude oil may witness bounce back at lower levels as crude oil may test Rs 3,840 while taking support near Rs 3,740. Natural gas can witness selling pressure as it can move towards Rs 161 while facing resistance near Rs 166.
Spices: Turmeric futures (Nov) are likely to plunge further to test Rs 5,700, if they break Rs 5,760. Jeera futures (Nov) are expected to face resistance near Rs 16,480 and trade with a negative bias. Dhaniya futures (Nov) are expected to face resistance near Rs 6,100 and the upside may remain capped.
Oilseeds: Soybean futures (Nov) are likely to hold on to the support near Rs 3,685, while the upside may get extended till Rs 3,740. Mustard futures (Nov) are expected to trade higher and test Rs 4,200-4,225. CPO futures (Nov) are likely to trade sideways to up in the range of Rs 553-560.
Other commodities: Cotton futures (Oct) are expected to trade with a negative bias and may even break the near support of Rs 19,420. Chana futures (Nov) may trade higher to test Rs 4,550. Mentha oil futures (Oct) may take support near Rs 1,190-1,185 due a fall in warehouse stocks.