MCX Gold was trading 0.22 per cent down at Rs 30,977 per 10 grams at around 10.25 am whereas MCX Silver was 0.08 per cent down at Rs 39,771 per kg.
Base metals in the international market advanced on Wednesday, with copper and lead gaining ground on fears of a supply squeeze. Nickel and zinc tracked the ferrous complex higher following an explosion at an iron ore mine in China.
Crude oil prices firmed up after Venezuela raised the prospect of halting some crude exports, according to reports.
Here’s SMC Global Securities’ take on how different commodities are likely to shape up ahead.
Bullion counter can trade with sideways bias as fear of interest rate hike by the Fed is keeping prices downbeat. But easing of US treasury yields and trade war with China have capped the downside.
Gold can take support near Rs 30,900 and can face resistance near Rs 31,250 on MCX. Meanwhile, silver can take support near Rs 39,600 and can face resistance near Rs 40,100.
The US Treasury yields fell on Tuesday as traders piled back into lower-risk government debt after Italy’s new prime minister vowed to enact economic policies that could balloon the nation’s already-heavy debt load.
Base metals can witness some profit booking at higher levels. Supply concerns are supporting copper as it can take support near Rs 465 with resistance near Rs 478. Copper jumped to highest levels since February-end as worries about supply disruptions in key producing region resurface amid wage talks at the world´s biggest mine BHP’s Escondida mine in Chile.
Zinc can take support near Rs 213 and find resistance near Rs 217 while lead can draw support near Rs 167 and can face resistance near Rs 170.
LME lead hit a more than three-month high at $ 2,528 a tonne, tracking a 4 per cent rally in Shanghai prices to a 19-month peak after the government in China’s northern province of Hebei announced environmental inspections on the acid industry.
Nickel may remain sideways with upside bias it can take support near Rs 1,040 and move towards Rs 1,080. Aluminium is seen to trade mixed as it can take support near Rs 155 and face a hurdle near 158 on MCX. Aluminium inventories held in London Metal Exchange-registered warehouses fell by another 7,050 tonnes, data showed on Tuesday, pushing them to their lowest since early February at 1.192 million tonnes.
Energy – Crude and natural gas
Crude oil can take support near Rs 4,320 and it has resistance near Rs 4,430 on MCX. US crude inventories fell by 2 million barrels, compared with the expectations for a decrease of 1.8 million barrels, American Petroleum Institute data showed after Tuesday’s settlement.
Natural gas can stay mixed as it can take support near Rs 192 and stares at resistance near Rs 198. The US natural gas futures slipped as generation holds near record highs despite forecasts for a little more demand next week than previously expected.
Chana futures for July are expected to trade with a downside bias and remain below Rs 3,580 levels. Chana prices remained weak at major spot markets in the country due to sluggish millers’ buying support as sale counters in processed chana and besan were still lacklustre despite lower price difference between chana and white pea.
Second, demand in kabuli chana is dull from domestic consumption centres while export demand is also not encouraging due to ample stock in the global market and price parity.
Cotton futures for June is likely to move in the range of Rs 22,100-22,400 levels. The initial sowing reports have highlighted that farmers in the country have sown cotton across 9,95,800 hectares as of Thursday in the ongoing Kharif season, down 18.3 per cent from the year-ago period, according to data released by the farm ministry.
The area under cotton is likely to decline as distressed farmers in Punjab, Maharashtra, Telangana and Andhra Pradesh have evinced weak interest in this cash crop. The short covering in guar seed futures for July is expected to face resistance near 3650-3670 levels while guar gum futures will possibly trade with a negative bias and remain below Rs 7,600 levels.
Buyers are hesitant to procure guarseed as good monsoon has raised prospects of sowing and production. Moreover, guarseed stock in the country is already ample and next crop is expected to be better in case monsoon makes good progress in producing states of Rajasthan, Gujarat, Punjab and Haryana.