Gold and Crude Oil - July 20, 2023 - HDFC Securities

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

Gold prices edged higher on Thursday, with the spot gold price at Comex trading up by 0.25% at $1982 per ounce. Gold August future contract at MCX is trading higher by 0.10% at Rs 59850 per 10 grams.

Comex gold prices advance further following a weaker dollar index, and traders expect that the U.S. Federal Reserve might soon hit pause on its interest rate-hiking cycle after increasing in July. The Federal Reserve is expected to raise rates by 25 basis points at its meeting next week, a scenario that's already discounted by bullion traders. Meanwhile, the US dollar traded at 99.77, down by 0.06% against the previous close.

We believe precious metals short-term trend remains positive and the price can rally further from the current level. Comex spot gold has resistance at $1993/oz. The upside will extend to $2010/oz if the price crosses resistance at the $1993 level. MCX Gold August future has support at Rs 59560 per 10 gram and resistance at Rs 60300 for the day.

Crude Oil traded higher on Thursday, with the benchmark NYMEX WTI crude oil trading up by 0.25% at $75.55 per barrel against the previous close. Crude oil prices are supported by declines in crude stockpiles in the US and a weaker dollar. The US stockpile report showed inventories at the largest storage hub, Cushing, fell the most since October 2021 last week. Meanwhile, China's crude oil imports from Russia in June, at their highest level so far in 2023, suggested demand would remain steady despite weak macro data.

We expect crude oil prices to consolidate within a range. Traders roll over their positions ahead of West Texas Intermediate's August contract expiry today. NYMEX WTI crude oil has resistance at $77.20 and support at $73.95. The MCX Crude oil August contract has resistance at Rs 6320 and support at Rs 6095 for the day.