Gold, Crude Oil and Base Metals - Feb 27, 2023 - HDFC Securities

By Mr. Saumil Gandhi, Senior Analyst - Commodities, HDFC Securities

Gold:

Gold prices traded marginally higher on Monday, with spot gold prices at Comex were trading up by 0.05% at $1813 per ounce. Gold April future contract at MCX were trading down by 0.10% at Rs 55384 per 10 grams by noon session.

Gold prices fell to two months low with spot gold price at Comex ended lower by 1.70% at $1811 per ounce last week. Gold prices throughout the last week witness selling pressured as following series of strong US macro data raised concern about more aggressive interest rate hike will be delivered by Federal reserve in upcoming meeting. Higher interest rate scenario negative for non-yielding metals. Looking for this week, we expect gold prices will consolidate in lower range with negative bias, and fall will extend to $1780 once price break support of $1791. Comex Spot Gold having strong resistance at $1840 per ounce and support at $1780 per ounce, for the week. MCX Gold April future has resistance at Rs 56100 per 10 grams and support place at Rs 55040 per 10 grams.

Crude Oil:

Crude Oil prices traded up with benchmark NYMEX WTI crude oil were trading up by 0.17% at $76.40 per barrel on Monday. MCX Crude oil March future was trading higher by 0.13% at 6350 by noon session. Oil rally is supported by optimist about Indian and Chinese demand. With China's oil imports likely to hit a record high in 2023 and demand from India, the world's third-biggest oil importer, surging amid tightening supplies. However further upside capped in Oil price by higher inventory in US. Crude oil inventories in US rose for the ninth week in a row, surging to their most since May 2021.

We expect Crude oil prices will consolidate in broader range and prices likely to face selling pressure on higher levels. NYMEX WTI Crude oil prices face resistance at $78.0/$80.0 per barrel and supports at $73.80/70.0 per barrel. MCX Crude Oil Mar future has strong supports at Rs 6140/6070 and resistance at Rs 6540 for this week.

Base Metals:

Base metals prices corrected sharply on prospects of further hike in interest rate in the United States stalling economic growth and crimping demand for the metal. Short term sentiment turns bearish in base metals as stronger US Dollar and market concern about demand recovery. The dollar Index reached a seven-week high, after serious of strong U.S. economic data. Copper price fell to eight weeks low last week, however further downside capped by supply concern. Copper supply from Indonesia, Peru and Chile has been facing disruptions recently.

We expect Base Metals prices in short term trend remains bearish and selling pressure will see near resistance level. This week investors focus will be on Manufacturing PMI data from US, Euro and China, which is consider as key indicator for measuring health of economic activity around the world. MCX Copper March future has strong support at Rs 735.0 and resistance at Rs 770.0 level.

Source : Equity Bulls

Keywords

Gold CrudeOil BaseMetals HDFCSecurities