CapitalVia Global Research - Commodity market outlook for week beginning January 20, 2014

Fundamental & Technical Outlook on Commodities - Mr. Vivek Gupta - Director Research, CapitalVia Global Research Limited

Precious metal:

Gold prices remained in a range to down for the week. As the number of Americans filing new claims for unemployment benefits fell for the second consecutive week, suggesting a sharp step-down in job growth in December was likely to be temporary. Lower U.S. inflation could raise interest in Gold, but it could also prompt Federal Reserve to change the pace of the roll back of its bond-buying program. Earlier this week, the World Bank raised its forecast for global growth for the first time in three years as advanced economies started to pick up pace. Gold prices are expected to move in a range as positive US data has reduced the safe haven appeal for Gold and marginal physical buying in Gold can keep the prices in range.

Over all, MCX Gold February future is in consolidation and sustaining in range. For the coming week 28500/28000 will act as a major support whereas 29000/29371will act as a major resistance level in MCX Gold February future. For the next week in MCX Gold, trader can use sell on higher level strategy, if MCX Gold February future sustain below the levels of 28865 then it could test the levels 28670 /28510.

Technically, MCX Silver March futures is consolidate and sustaining around lower levels. For the coming week 45740/47000 will act as major resistance levels where as 42000/39931 will act as major support in MCX Silver March futures. For the next week in MCX Silver futures, traders can use sell on higher level strategy, if MCX Silver March futures sustains below 44350 then it could test the levels of 43200/ 42000.

Energy:

US Crude prices remained in a range, as lower inventories data on Wednesday and lower crude oil demand in US over chilling weather kept the prices in range. OPEC has lowered its oil output further and is pumping less than this year's global demand for its crude, the exporter group said on Thursday. TransCanada Corp's Oklahoma-to-Texas Gulf Coast crude oil pipeline will begin commercial service next week at just over 300,000 barrels per day, less than half of its design capacity. Crude Oil prices are expected to move higher for the week as strong dollar and positive data from US can support the prices.

For the coming week 5600/5400 will act as major supports levels whereas 6000/6200 will act as major resistance in MCX Crude oil January futures. For the next week, trader can go for buy on lower level strategy, if MCX Crude January future sustain above 5835 levels then it could test the levels 5900/5990.

Base Metal:

Copper prices moved lower on Friday as poor demand from China and stronger dollar initially pushed the prices further down. Indonesia's nickel production will decline by 84 percent this year to 9 million tonnes compared to last years. We expect Copper prices to remain higher as positive US data along with physical demand can keep the prices in Bullish trend for copper. Other Base metals can keep the prices in range to higher for the week.

Trend of MCX Copper February future is in consolidation and also sustaining around lower levels. For the coming week, it could face major resistance of 483/500 whereas 455/439 could be a major support in MCX Copper. For the next week trader may follow buy on lower levels strategy, if MCX Copper future sustain above 462 levels then it could test the level of 470/483.

Source : Equity Bulls

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