By Mr. Saumil Gandhi, Senior Analyst - Commodities, HDFC Securities.
Gold prices traded lower on Wednesday, with the spot gold price at Comex trading marginally down by 0.17% at $1933 per ounce. The gold August future contract at MCX was trading lower by 0.10% at Rs 58752 per 10 grams by noon. Comex spot gold prices hovered near a critical support level of $1930/oz as investors remained cautious ahead of Federal Reserve Chair Jerome Powell's testimony.
Federal Reserve Chair Powell will deliver his semi-annual testimony to Congress later today, which could provide more insight on the interest-rate path ahead. Meanwhile, the dollar index continued to recover and traded above the 102.0 level in the Asian trading hours on Wednesday.
Going forward, we expect sideways trading to continue in gold before the Fed Chair testifies, and volatility is likely to expand post-event. On the technical front, Comex spot gold has strong support at $1925/oz; if price breaks this support, the fall will extend to the $1910/oz level. The area around $1960/oz acts as resistance for the day. MCX Gold August future has support at Rs 58405 and resistance at Rs 59370.
Crude oil prices edged higher on Wednesday, with the benchmark NYMEX WTI crude oil trading up by 0.50% at $71.20 per barrel. Crude oil prices recovered from a two-day losing streak as bargain hunters were active at the support level. However, prices still traded within the range over gloomy fundamentals. Despite China's attempts to boost its economy, concerns about demand recovery in China are affecting sentiment. On Tuesday, China's National Petroleum Corporation lowered its forecast for a rise in oil demand in China this year from 5.1% to 3.5%, highlighting concerns about the weak energy demand growth in the largest Asian economy.
On the technical front, we expect NYMEX WTI crude oil should trade within the range of $69.80 to $73.20 with a negative bias. MCX Crude Oil July future has support at Rs 5780 and resistance at Rs 6020.