The Economic Times
English EditionEnglish Editionहिन्दी
| E-Paper
Search
+

    Commodity strategies: Gold, silver, crude, base metals

    Synopsis

    Bullion prices gained on dollar decline as US president Trump signed the $2.3 trillion aid and spending package which he refused to sign in previous week.

    Shutterstock.com

    Commodity Summary

    MCX
    By Tapan Patel

    Commodity prices traded mixed during the week passed by with most of the commodities in non-agri segment witnessed selling pressure on stronger dollar and demand growth worries over pandemic fears. The dollar index ended up by 0.34 percent to 90.32 mark for the week. Here is a look at how different commodities are behaving in today’s market.

    Outlook: Bullion
    Bullion prices traded higher on Monday with spot gold prices at COMEX was trading over half a percent up to $1,890 per ounce while spot silver prices at COMEX was trading up by nearly 3% to $26.50 per ounce in the morning trade. Bullion prices gained on dollar decline as US president Trump signed the $2.3 trillion aid and spending package which he refused to sign in previous week. The pandemic concerns over new strain of coronavirus and increase lockdowns has also lifted bullion prices from the support levels. We expect bullion prices to trade sideways to up for the day.

    Trading Strategy:
    MCX Gold February resistance for the day lies at Rs. 50,800 per 10 grams with support at Rs. 50,100 per 10 grams.
    MCX Silver March support lies at Rs. 67,500 per KG, resistance at Rs. 71,000 per KG.

    Outlook: Crude Oil
    Crude oil prices traded under pressure with benchmark NYMEX WTI crude oil prices were trading marginally down to $48.10 per barrel on Monday. Crude oil prices traded weak over fuel demand recovery concerns. The new lockdown measures with travel restrictions has put pressure on crude oil prices over stalled economy. Crude oil prices are expected to trade sideways to down for the day on weak global cues.

    Trading Strategy:
    MCX Crude Oil January support lies at Rs. 3,470 per barrel with resistance at Rs. 3,620 per barrel.

    Outlook: Base Metals
    Base metals prices traded higher on Monday with most of the metals witnessing strong buying over US aid package and spending. Lead, Copper and Zinc reported gains while Nickel prices were trading with marginal gains on weaker dollar. Base metals also recovered on positive global cues as UK and European Union are in final stage of the Brexit agreement which boosted regional currencies pressuring the dollar. Base metals are expected to trade sideways to up for the day.

    Trading Strategy:
    MCX Copper January support lies at Rs. 607 and resistance at Rs. 614.
    MCX Zinc January support lies at Rs. 219, resistance at Rs. 225.
    MCX Nickel January support lies at Rs. 1,280 with resistance at Rs. 1,320.

    (Tapan Patel is a Senior Analyst (Commodities) at HDFC securities)

    By Ravindra Rao

    MCX Gold February has breached the higher end of the consolidation range of Rs 49,680-50,280 as the lower band got support from the 21 day EMA at Rs 49,810. The momentum is still bullish as indicated by RSI at 55.8 and bullish crossover of 5 and 21 day EMA. Moreover price also took support of the trend line, which could be the key in near term. As long as Rs 49,800-49,650 holds, price is expected to move towards the initial resistance of Rs 51,000.

    Strategy:
    Buy MCX Gold Feb at Rs 50,200 with a target of Rs 50,900 and a stop loss at Rs 49,800.

    MCX Silver March future continued to move inside the upward sloping channel with lower band support near Rs 66,400-66,200. Price also got support from 5 day EMA along with the earlier breakout turned support near Rs 66,600. Moreover the bullish crossover of 5 and 21 day EMA along with strong RSI at 60 strengthened the bull case. Buying might be seen in dips for an upside objective of Rs 71,200, followed by Rs 71,600.

    Strategy:
    Buy MCX Silver March at Rs 68,400 with a target of Rs 71,200 and a stop loss at Rs 66,600.

    (Ravindra Rao is VP-Head - Commodity Research at Kotak Securities)
    (Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)
    (What's moving Sensex and Nifty Track latest market news, stock tips and expert advice on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds.)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    The Economic Times