Commodity strategies: Gold, silver, crude, base metals


HDFC Securities
(Analyst: Tapan Patel)

Commodity prices traded positive on Monday with crude and base metals witnessing strong buying on positive global cues. Bullion prices managed to end in the green after facing correction in early trade. Investment sentiments improved after Moderna Inc reported a 94.5 per cent efficacy rate for its candidate mRNA-1273 on Monday on the back of its large, late-stage phase III COVE study. The dollar index ended marginally down for the day. Here is a look at how different commodities are behaving in today’s market.

Outlook: Bullion

Bullion prices traded steady on Tuesday amid mixed global cues, between rising covid cases and vaccine optimism. Spot gold prices at COMEX were trading flat near $1,888 per ounce while spot silver prices were trading at $24.71 per ounce. Bullion prices are expected to trade with positive bias amid current uncertainty over rising virus cases and US administration post election. The weaker dollar may continue to support bullion prices to trade firm.

Trading Strategy

  • MCX Gold December resistance for the day lies at Rs 51,100 per 10 grams with support at Rs 50,500 per 10 grams.
  • MCX Silver December support lies at Rs 61,500 per KG, resistance at Rs 65,000 per KG.

Outlook: Crude Oil

Crude oil prices extended gain on Tuesday on positive global cues over vaccine hopes which pinned down demand growth worries. Crude oil prices traded higher on expectations of extended output cut from OPEC plus nation in November meeting. The improved demand from China as per October data also supported oil prices to trade higher. We expect crude oil prices to trade sideways to down for the day on weak fundamentals.

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Trading Strategy

  • MCX Crude Oil November support lies at Rs 3,940 per barrel with resistance at Rs 3,160 per barrel.

Outlook: Base Metals

Base metals prices halted previous gains witnessing mixed trading on Tuesday. Copper prices traded flat after hitting 29-month high on Monday as vaccine hopes boosted demand prospects. Copper is up 6 per cent in November, getting boost from rebound in China’s manufacturing and infrastructure activity. The rally in equity indices and weaker dollar may continue to support base metals on risk on sentiments.

Trading Strategy

  • MCX Copper November support lies at Rs 541 and resistance at Rs 551.
  • MCX Nickel November prices support lies at Rs 1195, resistance at Rs 1170.

Kotak Securities
(Analyst: Ravindra Rao)

MCX Gold

Yesterday Gold price registered a long-lower shadow candlestick pattern by making a low of Rs 50,150 and managed to give a close at Rs 50,860. Immediate supply zone at Rs 51,150/51,200 would hold as the key resistance zone while the downside is capped at Rs 50,150. ATR expansion suggests the volatility in price could be high. Relative strength index (RSI) is at 49.90, indicating the sideways to bearish bias.

Strategy

  • Sell MCX Gold Dec at Rs 51000; target at Rs 50400 and stop loss at Rs 51,200.

MCX Silver

Silver price formed a hammer candlestick in the middle of the sideways trend. A hammer in the middle of the trend is not significant so it won’t have much of an impact. Immediate support is at Rs 62,500/62,000 while the resistance is placed at Rs 64,200/64,500. Relative strength index (RSI) is at 53.40 levels suggesting the sideways to mild positive bias. However, the upside momentum will resume only on a sustained close above Rs 64,500. Until then, sell on rise would be the ideal strategy.

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Strategy

  • Sell MCX Silver Dec at Rs 64,000; target at Rs 63,000 and stop loss at Rs 64,500.





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