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

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

Gold prices edged lower on Monday, with spot gold prices at Comex were trading down by 0.80% at $1959 per ounce. Gold April future contract at MCX were trading down by 0.75% at Rs 58820 per 10 grams by noon session.

Gold prices extended loss as short-term traders lock profit after price rose above $2000 per ounce last week and sentiment was hurt after Federal Reserve Bank of St. Louis President James Bullard said that he raised his forecast for peak interest rates this year amid ongoing economic strength, based on an assumption that banking sector strains will ease. Domestic market retail demand remained sluggish as higher prices, however demand will likely to improve if further correction in price. We expect gold prices continues to be influenced by various macro forces ranging from Federal Reserve interest rate hike expectations, lingering banking fears (recently banking-sector fears spread to Germany's Deutsche Bank), dollar weakness, and falling Treasury yields. Technically gold prices are in uptrend as prices form higher top higher bottom and we expect the same trend will continue this week. For the week Comex spot gold having supports at $ 1935/1919 per ounce and resistance at $2010/$2023 per ounce. MCX Gold June future having support at Rs 58140 per 10 gram and resistance at Rs 60300 per 10 grams.

Crude Oil prices traded positive with benchmark NYMEX WTI crude oil were trading higher by 0.38% at $69.50 per barrel on Monday. Crude Oil market recovered after prices hit multi weeks low last week. Crude oil price extended relief rally on Monday trading session as concerns over turmoil in the banking sector eased, while comments by Russian President Vladimir Putin over the weekend ratcheted up geopolitical tensions in Europe. President Vladimir Putin said he will station tactical nuclear weapons in Belarus, escalating geopolitical tensions in Europe over Ukraine.

We expect Crude oil prices should trade in broader range of $65.80 to $72.40 per barrel this week with positive bias. NYMEX WTI Crude oil prices face resistance at $72.40 per barrel and find supports at $65.80 per barrel. MCX Crude Oil April future having supports at Rs 5440 and resistances at Rs 5980 for this week.

In Base metals Copper prices surged almost 4.0% on back of tight supply, improved demand and higher spot premium. While Zinc price closed lower by 1.18% last week.

Copper price can rally further as market optimist about Chinese demand, tight supply and weaker dollar index boosted sentiment. Copper demand in the world's top consumer China has been improving in the wake of seasonal demand pick-up, along with post-pandemic economic recovery. On supply front, worries about copper supplies on the LME market have resurfaced as cancelled warrants metal earmarked for delivery are at 45% of the total at 73,475 tons compared with 29% a week ago.

We expect base metals prices should trade in broader range with positive bias. Investors focus will be on this week Chinese Manufacturing PMI data, which could provide further direction. MCX Copper April future having strong support at Rs 750 per kg and resistance place at Rs 787 per kg for the week.

Source : Equity Bulls

Keywords

Gold CrudeOil BaseMetals HDFCSecurities Commodities