Gold and Crude Oil - October 3, 2023 - HDFC Securities

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

Gold prices traded lower on Tuesday, with the spot gold price at Comex trading down by 0.15% at $1825 per ounce. While the gold October future contract at MCX is trading lower by 1.15% at Rs 56937 per 10 grams.

The price of Comex gold dipped to about $1,815 on Tuesday during the Asian session, marking its lowest level since March 9, continuing its ongoing and well-established downturn for a seventh day. The US Treasury bond yields have reached a new multi-decade high on the back of the Federal Reserve's narrative that interest rates would remain higher for longer. This narrative also supports the US dollar, which is thus seen as hurting gold prices.

Looking at the short-term chart of Comex Gold on the daily chart, it has created a lower high and lower low formation and has broken through its prior key support of $1850, which points to additional weakness. It has immediate support at $1810 and resistance at $1848. The price is expected to trade in this range for the day. MCX Gold December future has resistance at Rs. 57400 and supports at Rs. 56580/56350.

Crude oil edged higher on Tuesday, with benchmark NYMEX WTI crude oil trading up by 0.25% at $88.90 per barrel against the previous close. Crude oil prices recovered after hitting a three-week low in the morning session due to rising supply from Nigeria and Iran, a strong US dollar, and a technically price in overbought territory.

We believe oil prices are discounted in all bullish fundamentals, and in the short term, the price may witness a healthy correction, but our view remains moderately bullish in the medium term as winter demand keeps supporting oil prices. Technically, NYMEX WTI Crude Oil has resistance at $91.50 and support at $87.50. The MCX crude oil October contract is likely to trade in the range of Rs. 7320 to 7525.