Gold, Crude Oil and Base Metals - May 15, 2023 - HDFC Securities

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

Gold prices traded up on Monday, with spot gold price at Comex was trading higher by 0.19% at $2023 per ounce. Gold June future contract at MCX were trading up by 0.24% at Rs 61035 per 10 grams by noon session.

Gold prices resumed trading on positive note as safe haven demand amid mounting fears over the US debt-ceiling crisis and banking sector crisis. In the previous week Comex spot gold price declined by 0.30% and settled at $2010.0 per ounce as rally in US dollar and lack of follow up buying near resistance level pushed price lower. On the investment front, holdings in gold-backed ETF funds expanding to the highest in six months last week.

We expect bias remain positive on Gold on the back of safe haven buying as ongoing concern about US debt-ceiling crisis. For the week Comex spot gold having resistances at $ 2035/$2060 per ounce and supports at $2010/$1980 per ounce. MCX Gold June future having supports at Rs 60525/60300 per 10 gram and resistances at Rs 61400/61850 per 10 grams.

Crude oil prices traded marginally up with benchmark NYMEX WTI crude oil was trading higher by 0.19% at $ 70.17 per barrel on Monday. Despite of today's recovery in our view remains moderate bearish in crude oil over bearish macro factors. Recent fall in crude oil price driven by the physical market showing signs of weakness amid poor refining margins and lackluster buying in some areas. Another bearish factor, Investors are worried about demand concern from world top two consumer US and China as evidence of slowing economic activity.

We expect Crude oil price should consolidate within lower range with negative bias. NYMEX WTI Crude oil prices face resistances at $73.40/$75.50 per barrel and find supports at $67.80/ $65.0 per barrel. MCX Crude Oil June future having supports at Rs 5680/5540 and resistances at Rs 5970/6100 for this week.

Most of base metals price hit fresh swing low in the last week as traders concern about demand from US and China. Lower than expected recovery in top metal consumer China exacerbated worries over the demand outlook against rising supplies. Consumption for industrial metals in China has remained weak in the second quarter which is traditionally a peak demand season due to a slow economic recovery and sluggish export market. On the supply front, China the world's top metal producer, boosted output of copper and aluminum as smelters ramped up runs last month also weighed on price.

Base metals short term trend remains moderate bearish and any pullback in prices use as selling opportunity. MCX Copper May future has immediate support at 719, below that price will move toward 712/705 levels and face resistances at 740/755 for the week. MCX Zinc May future having supports at 220.80/212.0 and resistances at 234/239.