Gold and Crude Oil - July 26, 2023 - HDFC Securities

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

Gold prices traded higher on Wednesday, with the spot gold price at Comex trading up by 0.35% at $1971 per ounce. Gold August future contract at MCX is trading higher by 0.47% at Rs 59472 per 10 grams. The decline in the dollar index helped boost gold prices.

The dollar index was trading at the 100.72 level, down by 0.20% against the previous close, as traders trimmed positions ahead of the FOMC policy meeting outcome. The US Federal Reserve is widely expected to hike interest rates by 25 basis points at today's meeting, but the accompanying statement will be closely watched. A hawkish stance could provide support for the US dollar and weigh on gold. While a dovish stance could put downward pressure on the US dollar, helping gold. A more data-dependent approach may bring the US dollar and gold back to their previous trading ranges.

From a technical perspective, Comex gold has a key resistance level at $1987; if it crosses this level, the price may rally towards the $2014 level. On the flip side, it has strong support at $1925. The MCX Gold August future has support at Rs 58980 and resistance at Rs 59750.

Crude oil retreated on Wednesday after a four-day rally of more than 5% as traders took profit and waited for the US interest-rate decision, with the benchmark NYMEX WTI crude oil trading down by 0.45% at $78.84 per barrel against the previous close. Crude Oil prices have rallied this month as OPEC+ heavyweights Saudi Arabia and Russia have cut their supply. Meanwhile, the API reported a mixed picture on crude inventories, seeing an increase of 1.3 million barrels at the national level last week but a drop of 2.3 million at the key oil storage hub at Cushing, Oklahoma.

Investors are now looking for US government inventory report data due later today. On the technical front, crude oil's short-term trend remains bullish, and the price can rally further from its current level. Traders should adopt a buy-on-dip strategy. NYMEX WTI crude oil has resistance at $82.60 and support at $77.50. The MCX Crude Oil August contract has resistance at Rs 6600 and support at Rs 6420.