Gold and Crude Oil - April 21, 2023 - HDFC Securities

By Mr. Saumil Gandhi, Senior Analyst - Commodities, HDFC Securities.

Gold prices traded down Friday, with spot gold price at Comex was trading lower by 0.80% at $1987.0 per ounce. Gold June future contract at MCX was trading down by 0.70% at Rs 60070 per 10 grams by noon session.

Comex Spot gold price slipped below physiological level $2000 per ounce on today's session as pressured by threat of rising interest rate in the UK and US continues create headwinds for precious metal. Meanwhile investment demand also sliding this week, as per data compiled by Bloomberg, ETF cut 25,541 troy ounces of gold from their holdings in the last trading session, bringing this year's net sales to 335,822 ounces. Domestic market retail demand will likely to improve ahead of auspicious occasion of Akshay Tritiya. In domestic market Gold has given almost 19.0% return from last Akshay Tritiya to till date. Despite of record high gold price we expect gold price has still potential further upside and it can outperform to other assets class in current scenario. We recommend Investors should buy Gold in upcoming auspicious Akshaya Tritiya. For the day, we expect gold prices should consolidate within range with negative bias. Comex spot gold having supports at $ 1965/$1950 per ounce and resistances at $2005/$2017 per ounce. MCX Gold June future having support at Rs 59550 per 10 gram and resistance at Rs 60600 per 10 grams.

Crude Oil prices extended loss on Friday with benchmark NYMEX WTI crude oil was trading down by 0.10% at $77.30 per barrel. This week Crude oil prices tumbled more than 6.0% as concerns over slowing economic growth which could likely to hurt crude oil demand. Yesterday's US economic data showed weekly jobless claims rose last week, indicating the U.S. labour market may be starting to show signs of slowing as the lag effect of multiple interest rate hikes by the Federal Reserve while The U.S. Leading Economic Index, a gauge of future economic activity, also dropped to its lowest level since November 2020 overnight and it is signaling a recession starting mid-2023, added concerns about a slowdown in fuel demand.

We expect current decline in crude oil will likely to extend further and Nymex WTI Crude oil price should fall towards $75.80 per barrel. NYMEX WTI Crude oil prices having resistances at $79.0/$80.80 per barrel and support at $75.80 per barrel for the day. MCX Crude Oil May future has support at Rs 6260 and resistance at Rs 6500.