Gold and Crude Oil - Aug 22, 2023 - HDFC Securities
Posted On:
2023-08-22 20:05:38 (Time Zone: IST)
Mr. Saumil Gandhi, Senior Analyst - Commodities, HDFC Securities.
Gold prices rose on Tuesday, with the spot gold price at Comex trading up by 0.40% at $1903 per ounce. While the gold October future contract at MCX is trading higher by 0.25% at Rs 58650 per 10 grams.
Gold prices rebounded, helped by a weaker dollar index and safe-haven demand. The dollar index retreated from a two-month high and is currently trading at 102.80, down by 0.10% against the previous close. Gold sellers trimmed their positions due to factors such as increased risk aversion in the market after S&P followed Moody's in downgrading and cutting the outlook for a slew of US banks. Gold is generally beneficial in the event of economic uncertainty.
We believe range-bound trade will continue in precious metals as traders await the outcome of the Federal Reserve's annual conference in Jackson Hole due on Friday. From a technical perspective, Comex spot gold has support at $1884 and resistance at $1912. The price is expected to fluctuate in this range. The MCX Gold October future is expected to trade in a range of 58300 to 58780.
Crude oil extended losses on Tuesday on the back of signs that supplies may be rebounding and concerns that economic growth in China is headed for a slowdown. With the benchmark NYMEX WTI crude oil trading down by 0.25% at $79.88 per barrel against the previous close. Adding to the bearish sentiment are media reports that Iraq's oil minister intended to negotiate restarting oil shipments through the Ceyhan facility in Turkey. Rising monthly Iranian oil shipments, which are boosting global flows at a time when other producers are scaling back, are a further factor contributing to the negative mood.
We believe crude oil prices should witness further corrections from their current level, and traders should adopt a sell-on-rally strategy. From a technical perspective, NYMEX WTI Crude Oil has immediate support at $78.60; once price breaks this support, the fall will extend to $77.0, and it has resistance at $81.80. The MCX crude oil September contract has support at 6550 and resistance at 6800.
