Home Market Commodity outlook: Gold, silver may trade sideways; base metals look weak

Commodity outlook: Gold, silver may trade sideways; base metals look weak


Gold and silver prices were trading lower in morning trade on Friday on account of lacklustre demand for precious metals from jewelers, industries, investors and retailers. MCX Gold futures were trading 0.08 per cent down at Rs 32,047 per 10 gram, while MCX Silver futures were trading 0.16 per cent down at Rs 38,795 per 1 kg at around 10.08 am (IST).

Want to know how commodities would behave today? Here's the outlook by SMC Global Securities.

Gold and silver: Bullion counter may trade sideways to up taking positive cues from the international markets. Gold can take support near Rs 31,800 and can face resistance near Rs 32,200 in MCX. While Silver can take support near Rs 38,500 and it has resistance near Rs 39,110.

Base metals: Base metals prices can trade on weak bias. Copper can face resistance near Rs 453.20 and can take support near Rs 445. Zinc can face resistance near 202.50 and support near 196.25. Nickel can take support near 890 while its upside will be capped near 920. Aluminium can take support near 147.15 levels while it has resistance near 150 levels.

Crude oil: Crude oil can take support near Rs 5000 and resistance near Rs 5150 in MCX. On NYMEX, Oil prices nudged higher on Friday but were set for a second weekly drop amid higher US crude inventories. US West Texas Intermediate crude for October delivery was up 27 cents, or 0.4 percent, at $68.92 a barrel by 0124 GMT.

Spices: Further bearishness can be seen in turmeric futures (Nov) as it can face resistance near Rs 6615-6635. Trading activities are sluggish at major turmeric markets amid lackluster buying and arrival of low quality spice. Spot prices of turmeric are decreasing at the markets in Erode as only medium and poor quality produce arrived for sale.

Jeera futures (Nov) is expected to trade with an upside bias & test 20500. With the hope of increase in the consumption during the coming festival month, the traders are not hesitant to stock jeera even at a higher price. Cardamom futures (Nov) will possibly remain trapped in the range of Rs 1365-1410 with downside getting capped.

Oilseeds: Soybean futures (Nov) is expected to trade sideways in the range of Rs 3280-3325. The average arrival of new soybean crop is said to be at around 5,50,000 bags per day. It will increase to an average of 7,00,000 bags per day ahead as the harvest is now in full flow amid clear weather conditions. The crop is said to be in very good condition but the new seed still has higher moisture level of 12-14% as compared to the ideal 10 per cent.

Meanwhile, the Soybean Processors Association of India (SOPA) has come out with first survey for soybean crop for 2018 and pegged countrys crop over 37 per cent higher at 114.83 lakh tonnes versus 83.56 lakh tonnes.

Mustard futures (Nov) is likely to face resistance near Rs 4,220 levels. On the spot markets, the reduced crushers' demand due to slow sales in mustard oil is exerting pressure on this oilseed. A lower level buying can be seen near Rs 582 levels in CPO futures (Oct) as it has the potential to test Rs 600-602.

Other commodities: The correction in the mid-way of rally in cotton futures (Nov) is expected to witness a halt and take support near Rs 22,210. The current delays in the arrival of crop in Gujarat and Rajasthan mandis may also support the prices. According to US Department of Agriculture, production in India is projected at 28.7 million bales, 1 per cent below 2017/18, as area declines a similar percentage and the yield is forecast to be about the same as in 2017/18. Harvested area in India is expected to reach 12.3 million hectares in 2018/19, with a near-average yield forecast at 508 kg per hectare.

Cotton consumption in India is also projected to rise this season to 25.5 million bales, 3 per cent above 2017/18 and a record, if realized. In guar seed futures (Nov) there is more room for upside as it can test Rs 4685 levels.

The stockiest are active at each center and buying guar seed in good quantity with expectations of better return ahead amid lower crop estimates. This season, guar seed stocks are expected to decline to multi-year low this season 2018-19 due to fall in production back-to-back this year amid adverse weather conditions. Chana futures (Nov) will probably face resistance near Rs 4170 levels.

Original Article


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