Gold, Crude Oil and Base Metals - July 18, 2022 - HDFC Securities

Mr. Tapan Patel, Senior Analyst - Commodities, HDFC Securities.

Gold prices traded higher with spot gold prices at COMEX rose by 0.66% at $1719 per ounce on Monday. Gold Aug future contract at MCX was trading 0.73% down near Rs. 50471 per 10 grams by noon session.

Gold prices witnessed recovery supported by weaker dollar which was trading down by 0.62% at 107.24. The eased expectations of lesser that 1% hike in interest rates from US FED supported precious metals to trade up. We expect gold prices to trade sideways to up for the day with COMEX spot gold support at $1700 and resistance at $1730 per ounce. MCX Gold Aug support lies at Rs. 50100 and resistance at Rs. 50700 per 10 grams.

Crude Oil prices traded lower with benchmark NYMEX WTI crude oil prices rose by 2.59% to 97.06 per barrel on Monday. Crude oil prices extended gains on Monday, propped up by a weaker dollar and tight supplies that offset concerns about recession and the prospect of widespread COVID-19 lockdowns in China again reducing fuel demand. As expected, U.S. President Joe Biden's trip to Saudi Arabia failed to yield any pledge from the top OPEC producer to boost oil supply. We expect crude oil prices to trade up with resistance at $101 per barrel with support at $94 per barrel. MCX Crude oil July contract has important support at Rs. 7800 and resistance at Rs. 8170 per barrel.

Base metals prices traded lower during the week with most of the metals witnessed selling on stronger dollar and demand growth concerns. Copper capped its worst weekly decline in a year, at one point dropping below $7,000 a ton for the first time since 2020 amid deepening recession concerns. Markets have been plagued by two main worries: that Europe will slip into recession due to punishing energy prices and that China's biggest cities will continue to be locked down due to the country's Covid-zero policy. China's economy grew last quarter at the slowest pace since the country was first hit by the pandemic two years ago, underlining the impact of a Covid-Zero approach and a prolonged real-estate squeeze. Friday's data showed no sign of improvement in the slump in China's property investment that's sapping confidence in a sector key for metals demand.

We expect base metals to trade sideways to up with MCX Copper July support lies at Rs. 605 and resistance at Rs. 648. MCX Zinc July support lies at Rs. 260, resistance at Rs. 285. MCX Aluminium July support lies at Rs. 195 with resistance at Rs. 217.

Source : Equity Bulls

Keywords

Gold CrudeOil BaseMetals HDFCSecurities Commodities