Gold and Crude Oil - HDFC Securities - 05 July 2023

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

Gold prices traded slightly higher on Wednesday, with the spot gold price at Comex trading up by 0.15% at $1929 per ounce. Gold August future contract at MCX trading higher by 0.29% at Rs 58585 per 10 grams.

Gold prices are stuck in a choppy range as investors seek additional indications on the macro front ahead of important data line-ups from the US (ranging from FOMC meeting minutes to the job market report for the month of June). It can offer market players further information about the Federal Reserve's future policy course. Meanwhile, ETFs cut 118,903 troy ounces of gold from their holdings in the last trading session, bringing this year's net sales to 1.26 million ounces. This was the 11th straight day of declines.

We expect Comex gold prices to trade in a range of $1910 to $1935 per ounce for the day. The upside will extend to $1950/oz if the price crosses resistance at the $1935/oz level. MCX Gold August future has support at Rs 58020 and resistance at Rs 58850.

Crude Oil prices advanced on Wednesday, with the benchmark NYMEX WTI crude oil trading up by 0.32% at $71.22 per barrel. Crude oil extended its gain after increasing more than 2% on Tuesday as a result of production restrictions by Saudi Arabia and Russia. Additionally, supply-side worries arose after Libyan General Khalifa Haftar warned of military action unless oil revenues are distributed fairly within the next two months, threatening oil production shutdown that might have an effect on the world's energy markets.

On the technical front, the short-term setup of NYMEX WTI crude oil remains positive until the price holds above the support level of $69.80. For the day, NYMEX WTI crude oil has immediate resistance at $72.60 and support at $69.80. MCX Crude Oil July contract has resistance at Rs 5980 and support at Rs 5770.