Gold and Crude Oil - July 18, 2023 - HDFC Securities

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

Gold prices climbed on Tuesday, with the spot gold price at Comex trading up by 0.41% at $1962 per ounce. Gold August future contract at MCX trading higher by 0.31% at Rs 59320 per 10 grams.

Safe haven demand supports gold prices to move higher after China's second-quarter growth missed estimates, adding to worries about a slowdown in the world's second-largest economy. Meanwhile, the dollar index declined further, trading lower by 0.15% at the 99.31 level. A weaker dollar makes gold cheaper for holders of other currencies.

We expect the gold price to consolidate within a range with a positive bias. Comex spot gold has resistance at $1970/oz (100 DEMA). The upside will extend to $1983/oz if the price crosses resistance at the $1970 level. MCX Gold August future has support at Rs 58880 and resistance at Rs 59560.

Crude oil traded slightly up on Tuesday amid mixed fundamentals. Concerns over the state of China's economy were offset by Russia's plans to cut crude exports. With the benchmark NYMEX WTI crude oil trading down by 0.20% at $74.36 per barrel against the previous close. Russia will reduce its third-quarter crude export plans by 2.1 million tons, corresponding to its pledge to reduce overseas shipments by 500,000 barrels a day in August.

We expect that market participants are now looking for today's US retail sales and industrial production figures, which will provide them further insight into the US economy's health and access to the future demand outlook for oil. From a technical perspective, we expect the NYMEX WTI crude oil price to consolidate within a range of $73.80 to $76.20 for the day. MCX Crude August contract could trade in the range of Rs. 6010 to Rs. 6180.