Gold, Crude Oil and Base Metals - April 24, 2023 - HDFC Securities

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

Gold prices traded down on Monday, with spot gold price at Comex was trading lower by 0.08% at $1981 per ounce. Gold June future contract at MCX were trading down by 0.03% at Rs 59780 per 10 grams by noon session.

Comex spot gold price struggling to hold above physiological level $2000 per ounce as expectation that the Federal Reserve will continue its aggressive monetary tightening to curb inflation weighed on price. In last week, Comex spot gold ended lower by 1.05% at $1983 per ounce, throughout the last week price traded in choppy range with negative bias. ETF Investors also withdrawal money in last few sessions, ETF funds cut 10,614 troy ounces of gold from their holdings in the last trading session, bringing this year's net sales to 313,696 ounces, according to data compiled by Bloomberg. In Domestic market retail demand of jewellery and gold items remained sluggish on the auspicious Akshaya Tritiya day as record high price of the precious metal dampened the festive demand.

We expect consolidation phase will continue in bullion with negative bias. Comex spot gold having immediate support at $1965 per ounce if price breaks this support it will likely to fall towards $1950/$1935 per ounce. For the week Comex spot gold having resistances at $ 2010/$2033 per ounce and supports at $1950/$1935 per ounce. MCX Gold June future having support at Rs 59100 per 10 gram and resistance at Rs 60780 per 10 grams.

Crude oil prices extended loss with benchmark NYMEX WTI crude oil was trading lower by 1.35% at $ 76.81 per barrel on Monday. In last week crude oil price dropped more than 5.0%, recent sell off in crude oil prices driven by demand concern after series of weak US macro data indicated slowing economic growth which could likely to hurt crude oil demand. Investors also worried about more US interest rate hike by US Federal reserve in its upcoming policy meeting, Higher interest rate and decline in credit growth negative impacts on economic activity in world top oil consumer.

We expect crude oil prices could decline further after strong reversal in price last week. NYMEX WTI Crude oil prices face resistances at $80.40/$83.50 per barrel and find supports at $75.80/ $74.0 per barrel. MCX Crude Oil May future having supports at Rs 6250/6170 and resistances at Rs 6500/6880 for this week.

Most of Base metals have corrected last week, following disappointing manufacturing data and as fresh concerns emerged over tensions between the US and China. Zinc was top loser declined by 4.03% followed by copper dropped by 3.15%. Traders' sentiment turned bearish as recession fear increased after serios of weak US macro data. In the US, jobless claims rose to the highest since 2021 while a gauge of factory activity in Philadelphia plunged. Similar indexes in Germany and France slumped to the lowest in nearly three years. Meanwhile, the US is poised to impose curbs on investments in China by American companies, according to media report in the latest sign of the difficult relations between the world's top two economies.

We expect short term trend in base metals turned moderate bearish and price will likely to correct further from current level. Investor focus will be on release of US GDP data which could provide further insight of health of economic. MCX Copper May future has immediate support at 758 if price break this support, then it will fall towards 745/738 levels. While area around 784 acts as resistance for this week.