Mr. Tapan Patel, Senior Analyst (Commodities), HDFC Securities
Gold prices traded weak with spot gold prices at COMEX were trading over half a percent down near $1737 per ounce on Monday. Gold October future contract at MCX fell by 0.68% near Rs. 51127 per 10 grams by noon session.
Gold prices traded lower on stronger dollar and hawkish comments from several Fed officials suggested that the central bank was likely to commit to raising interest rates at a sharp clip to combat overheated inflation. The dollar index was trading 0.26% up near 108.37 on Monday. We expect gold prices to trade sideways to down for the day with COMEX spot gold support at $1730 and resistance at $1752 per ounce. MCX Gold October support lies at Rs. 50900 and resistance at Rs. 51400 per 10 gram.
Crude Oil prices traded lower with benchmark NYMEX WTI crude oil prices fell by more than 2% to $88.56 per barrel on Monday. Crude Oil prices traded lower on fears aggressive U.S. interest rate hikes may lead to a global economic slowdown and dent fuel demand. Oil prices also witnessed selling on reports suggesting that Iran and Western countries were close to striking a deal that would lift sanctions on crude supply from the West Asian nation. We expect crude oil prices to trade sideways to down with resistance at $91 per barrel with support at $85 per barrel. MCX Crude oil September contract has important support at Rs. 6980 and resistance at Rs. 7230 per barrel.
Base metals prices traded weak during the week with most of the metals kept lower trading range capping upside. Base metals traded under pressure on China demand growth worries despite of tight supplies. The stronger dollar also added pressure to the industrial metals. Copper held two days of gains and aluminum rose, as China's worsening power shortage tightened metal supplies in the world's top market. China's power crunch is adding risks to energy-intensive metals producers, especially for aluminum and zinc, with around half of the Europe region's total closed in the past year due to record power costs. Electricity issues are contributing to volatile trading of base metals as traders assess supply losses against the rising risk that runaway inflation and tightening monetary policy will hammer demand. We expect base metals to trade sideways to up with MCX Copper Aug support lies at Rs. 650 and resistance at Rs. 695. MCX Zinc Aug support lies at Rs. 305, resistance at Rs. 325. MCX Aluminium Aug support lies at Rs. 201 with resistance at Rs. 218.