Gold and Crude Oil - June 7, 2023 - HDFC Securities

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

Comex Spot gold prices retreated on Wednesday, with spot gold price at Comex was trading at $1961.0 per ounce down by 0.09%. While Gold August future contract at MCX was trading lower by 0.19% at Rs 59870 per 10 grams by noon session.

Gold prices traded slightly lower amid an uptick in the US dollar. Strength in the US dollar weighed on precious metals. The US dollar continues to sustain a higher level, and the bias remains positive as traders expect the Fed to hold interest rates steady at its June meeting while keeping the option for hikes later on. Fed fund futures indicate 51% odds of another 25-basis-point rate hike in July. Going forward, we expect gold prices to remain range-bound before the release of US inflation data and Federal Reserve meeting outcome due on next week. Comex spot gold is likely to find buyers around $1935 per ounce and while $1980 per ounce is the resistance for the day. MCX Gold August future likely to find support at Rs 59340 per 10 gram and resistance at Rs 60180 per 10 grams.

Crude oil prices recovered on Wednesday with NYMEX WTI Crude oil was trading up by 0.15% at $71.84 per barrel as trades optimist about demand outlook after hopes of stimulus from second largest consumer China to revive its tepid economic recovery, with authorities asked the nation's biggest banks to lower their deposit rates. Also demand from US likely to improve as summer driving season in the US. While US Crude oil inventory fell by about 1.7 million barrels last week against market expectation of increased by 1.50 million barrels according to API data.

We expect recovery in crude oil price likely to continue for the day. NYMEX WTI crude oil has resistance at $73.80 per barrel and finds support at $70.20/ per barrel. MCX Crude Oil June futures have supports at Rs 5805 per barrel and resistances at Rs 6040 per barrel.