By Tapan Patel
Commodity prices were higher on Wednesday as the entire non-agro segment traded in the green, supported by a weaker dollar and growing prospects of US stimulus. Commodity prices are fluctuating amid uncertainties over US aid package ahead of the US Presidential election and worries over a second wave of virus infections.
Here is a look at how different commodities are behaving in today’s market.
Bullion prices extended gains with COMEX spot gold prices trading at about $1,920 per ounce, close to its near-term resistance. Spot silver prices at COMEX gained nearly 1.5 per cent on Wednesday and traded near $25 in the morning trade. Bullion prices traded higher on dollar decline amid rising hopes for US stimulus package before the US election as the popularity gap between US Democrats and Republicans seems to be narrowing down. Bullion prices are expected to trade in the current range with sideways to up move for the day supported by weaker dollar and pandemic worries.
Buy on dips is advisable. MCX Gold December resistance lies at Rs 51,200 per 10 grams, support at Rs 50,600 per 10 grams. MCX Silver December support is at Rs 61,500 per kg, resistance at Rs 65,000 per kg.
Outlook: Crude Oil
Crude oil prices were weak with benchmark WTI crude oil paring some previous gains. Trading near $41.40 in Wednesday’s morning trade, crude oil prices declined on oversupply concerns and demand growth worries despite rising hopes for US stimulus package. The US API report showed that weekly crude oil inventories rose by 584,000 barrels against a forecast of decline of 1.9 mb. Crude oil prices are expected to trade sideways to down for the day ahead of EIA inventory data in evening session.
Crude oil prices may keep sideways to down trend with MCX Crude Oil November support lying at Rs 2,980 per barrel and resistance at Rs 3,120 per barrel.
Outlook: Base Metals
Base metals prices witnessed strong buying as a weaker dollar and positive cues from US stimulus talks boosted demand growth prospects. Copper prices at LME rose to near two-year highs on supply disruptions form Chile after Lundin Mining Corp. suspended operations at its Candelaria mine at midnight amid strikes and protests after the company failed to reach a wage deal with workers. Base metals may continue upside for the day on positive global cues over US stimulus and strong equity indices.
Buy on dips is advisable. MCX Copper October support lies at Rs 529 and resistance is at Rs 539. MCX Zinc October prices may keep positive trading with support at Rs 199 and resistance at Rs 205.
(Tapan Patel is Senior Analyst (Commodities) at HDFC Securities. Views are his own)
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