By Mr. Saumil Gandhi, Senior Analyst - Commodities, HDFC Securities.
Gold prices declined on Wednesday, with the spot gold price at Comex trading down by 0.11% at $1911 per ounce. Gold August future contract at MCX trading lower by 0.05% at Rs 58080 per 10 grams.
Gold prices hovered near three-month lows as a series of macro data showed a surprisingly strong US economy, giving the Federal Reserve more scope to keep raising rates. US New home purchases jumped nearly 13.0%, the fastest annual rate in over a year; durable goods orders unexpectedly climbed 1.7%; and consumer confidence reached the highest level since the start of 2022, with stronger macro data reducing safe haven demand in gold. Meanwhile, the dollar index traded slightly up by 0.11% at 102.25 in today's session.
Looking ahead, we expect the short-term trend to remain moderately bearish in gold, and gold prices are likely to witness a dip correction towards $1884/oz below the $1905/oz level. For the day, Comex spot gold has support at $1905 and resistance at $1933. MCX Gold August future has support at Rs 57850 and resistance at Rs 58560.
Crude oil prices extended losses on Wednesday, with the benchmark NYMEX WTI crude oil trading down by 0.05% at $67.95 per barrel. Weak macro data from China and hawkish comments from European Central Bank President Christine Lagarde added to concerns over the outlook for oil demand. The ECB is ready to raise rates further, which will put more pressure on the economy and may reduce oil demand. Meanwhile, Brent crude futures slipped to a discount to Dubai quotes on Wednesday for the first time since November 2020, indicating weak demand and a bearish outlook for the short term.
Inventors are now looking for today's EIA weekly crude oil inventory report. On the technical front, NYMEX WTI crude oil has immediate resistance at $70.20; until prices trade below this level, the short-term trend remains weak and the fall will likely extend towards $66.80. MCX Crude Oil July contract resistance is at Rs 5735, and support at Rs 5480 acts as support.