Gold and Crude Oil - June 22, 2023 - HDFC Securities

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

Gold prices edged lower on Thursday, with the spot gold price at Comex trading down by 0.25% at $1926 per ounce. The gold August future contract at MCX was trading lower by 0.35% at Rs 58515 per 10 grams by noon.

In the previous session, Comex spot gold prices hit a fresh three-month low on the back of hawkish remarks from the Fed Chair. In his semi-annual testimony to Congress, Federal Reserve Chair Jerome Powell reiterated that the central bank will continue raising interest rates and added that two more hikes this year are a pretty good guess. A higher interest rate is generally negative for non-yielding metals.

Going forward, we expect the short-term trend to remain moderately bearish in gold, and further selling pressure will trigger below the $1919/oz level. For the day, Comex spot gold has support at $1905/oz and resistance at $1939/oz. MCX Gold August future has support at Rs 58305 and resistance at Rs 58870.

Crude oil prices retreated on Thursday, with the benchmark NYMEX WTI crude oil trading down by 0.80% at $71.70 per barrel. On Wednesday, Crude oil prices surged more than 2.0%, taking positive cues from the physical market; Middle Eastern spot oil prices rose to a recent high and spot differentials for some grades have doubled over the last week due to improved demand from Asian countries. Meanwhile, US stockpiles dropped by more than 1.2 million barrels in the week ended June 16, against an estimate of 0.4 million barrels of decline, according to data from the American Petroleum Institute. Investors are now looking for government inventory data due later today.

We expect crude oil prices to continue trading within a broader range amid mixed fundamentals. For the day, NYMEX WTI crude oil has immediate resistance at $73.19 and support at $69.80 per barrel. MCX Crude Oil July contract support is at Rs 5825 and resistance is at Rs 6080.