By Mr. Saumil Gandhi, Senior Analyst - Commodities, HDFC Securities.
Gold prices traded higher on Wednesday, with the spot gold price at Comex was trading up by 0.32% at $1951 per ounce. Gold August future contract at MCX were trading up by 0.13% at Rs 59295 per 10 grams by noon session.
Gold prices recovered on today's session as US Consumer inflation data showed inflation is slowing on an annual basis, increasing expectation that the Fed will pause at its meeting ending today. US inflation rose at a 4% annualized in May, in line with consensus estimate. Investors are now waiting for the outcome of the Federal Reserve policy meeting and its forward policy guidance due later today. The CME's Fed watch tool sees a 95% probability that the Federal Reserve will leave rates unchanged but a 63% probability for a 25-basis point hike in July. On the technical front, we expect, looking at the daily time frame, that Comex Gold can correct further to the $1910/$1895 level if it breaks the support of the $1930 level. For the time being, $1984 remains the major supply area. MCX Gold August future is likely to find support at Rs 58780 and resistance at Rs 60170.
Crude oil price edged higher with the benchmark NYMEX WTI Crude oil was trading up by 1.0% at $70.12 per barrel on Wednesday. Investors are optimistic about the demand outlook after China's decision to cut borrowing costs and the expectation for further stimulus to boost up its economic growth. Meanwhile, news that the US is planning to buy about 12 million barrels of oil this year to refill its depleted emergency reserves supported sentiment. On the macro front, US consumer inflation declined in line with estimates, adding to expectations that the Federal Reserve will pause interest-rate hikes for the first time in 15 months.
On the technical front, we expect crude oil prices to rally further in today's session. For the day, NYMEX WTI crude oil has resistance at $73.19 per barrel and finds support at $67.70 per barrel. MCX Crude Oil June future has support at Rs 5670 per barrel and resistance at Rs 5905 per barrel.