Gold, Crude Oil and Base Metals - July 11, 2022 - HDFC Securities

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

Gold prices traded weak with spot gold prices at COMEX were trading 0.26% down near $1737 per ounce on Monday. Gold Aug future contract at MCX was 0.20% down near Rs. 50670 per 10 grams by noon session.

Gold prices are stuck in narrow range after US employment numbers failed to give clear direction. The stronger dollar continued to weigh on investment sentiment capping upside in the yellow metal. The US employment data released last week showed a healthy sign, which eased some recession fears, raising expectations of more monetary tightening from the U.S. Federal Reserve. We expect gold prices to trade sideways to down for the day with COMEX spot gold support at $1720 and resistance at $1750 per ounce. MCX Gold Aug support lies at Rs. 50300 and resistance at Rs. 50900 per 10 grams.

Crude Oil prices traded lower with benchmark NYMEX WTI crude oil prices fell by 2.56% to $102.11 per barrel. Crude oil prices traded down reversing some gains from the previous session, as worries about a recession and China's COVID-19 curbs hitting demand outweighed ongoing concerns about tight supply. Another key factor traders will be watching is maintenance on the Nord Stream 1 pipeline, the biggest single pipeline carrying Russian gas to Germany, due to run from July 11 to 21. We expect crude oil prices to trade sideways to down with resistance at $107 per barrel with support at $98 per barrel. MCX Crude oil July contract has important support at Rs. 7980 and resistance at Rs. 8260 per barrel.

Base metals prices traded down during the week with most of the metals extended decline. Investors are fretting over a range of threats to demand, from Europe's gas crisis to a US slowdown and renewed virus flare-ups in China. Copper extended a sharp retreat after the economic bellwether suffered one of its worst days since the depths of the pandemic in 2020 on growing fears of a global recession. China continues to see sporadic outbreaks of Covid-19 virus. Rising cases in Shanghai have prompted more rounds of mass testing in the financial hub, and the emergence of new sub- variants provides a constant challenge to the country's zero-tolerance approach to the virus. Authorities are mulling a plan to let local governments sell 1.5 trillion yuan ($220 billion) of special bonds in the second half, according to people familiar with the matter.

We expect base metals to trade sideways to down with MCX Copper July support lies at Rs. 630 and resistance at Rs. 680. MCX Zinc July support lies at Rs. 262, resistance at Rs. 292. MCX Aluminium July support lies at Rs. 202 with resistance at Rs. 218.

Source : Equity Bulls

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Gold CrudeOil BaseMetals HDFCSecurities Commodities