Gold and Crude Oil - June 27, 2022 - HDFC Securities

Mr. Tapan Patel, Senior Analyst (Commodities), HDFC Securities.

Gold prices traded firm with spot gold prices at COMEX were trading 0.63% up near $1839 per ounce on Monday. Gold Aug future contract at MCX were trading 0.57% up near Rs. 50923 per 10 grams by noon session.

Gold prices Gold prices were supported by weaker dollar and expectations that G-7 nations may ban import of new gold from Russia. Russia is the second largest miner of gold after China. The dollar index was 0.29% down at 103.66 for the day. We expect gold prices to trade sideways to up for the day with COMEX spot gold support at $1820 and resistance at $1850 per ounce. MCX Gold Aug support lies at Rs. 50500 and resistance at Rs. 51200 per 10 gram.

Crude Oil prices traded steady with benchmark NYMEX WTI crude oil prices were trading near $107.47 per barrel. Crude oil prices traded sideways as global economic concerns depressed the oil demand outlook while investors eyed the G7 meeting this week for possible moves on Russian oil exports and a revival of the Iran nuclear deal. We expect crude oil prices to trade sideways to up with resistance at $110 per barrel with support at $104 per barrel. MCX Crude oil July contract has important support at Rs. 8210 and resistance at Rs. 8650 per barrel.

Base metals prices traded lower during the week with most of the metals witnessed sell off on recession fears and weak demand from China. Metals are still on track for the biggest quarterly plunge since the 2008 financial crisis amid rising fears of an industrial slowdown across major economies. Copper, the great economic bellwether, has ricocheted into a bear market from a record four months ago, while tin just tumbled 21% in its worst week since a 1980s crisis froze London trading for four years. Chinese manufacturing activity is already shrinking, and S&P Global gauges on Thursday showed European manufacturing output contracting for the first time in two years, while US output hit a 23-month low.

We expect base metals to trade sideways to down with MCX Copper July support lies at Rs. 680 and resistance at Rs. 725. MCX Zinc July support lies at Rs. 287, resistance at Rs. 310. MCX Aluminium July support lies at Rs. 201 with resistance at Rs. 216.