Gold, Crude Oil and Base Metals - 06 June 2022 - HDFC Securities

Gold prices traded firm with spot gold prices at COMEX were trading marginal up near $1852 per ounce on Monday. Gold Aug future contract at MCX were trading firm near Rs. 51036 per 10 grams by noon session.

Gold prices rose on inflation worries and muted dollar index. The Federal Reserve is on track for half a point interest rate increases in June, July, and perhaps even beyond since fresh job market data showed no sign of the U.S. economy falling under to high inflation and rising borrowing costs. We expect gold prices to trade sideways to up for the day with COMEX spot gold support at $1840 and resistance at $1870 per ounce. MCX Gold Aug support lies at Rs. 50800 and resistance at Rs. 51300 per 10 gram.

Crude Oil prices traded higher with benchmark NYMEX WTI crude oil rose by 0.48% to $119.42 per barrel. Crude oil prices rallied to the highest level in almost three months after Saudi Arabia signalled confidence in the demand outlook by increasing the price of its crude for Asia by more than expected. The tight supplies and higher demand may continue to support oil prices to trade up in near term. We expect crude oil prices to trade up with resistance at $123 per barrel with support at $115 per barrel. MCX Crude oil June contract has important support at Rs. 9050 and resistance at Rs. 9380 per barrel.

Base metals prices traded mixed during the week with most of the metals kept positive trading range except Aluminium.. Zinc and Copper prices rallied the most on demand growth prospects with China re-opening the economic activities. Base metals traded up on tight supplies despite of stronger dollar.The Chinese domestic aluminum supply is expected to increase significantly in June. There are strong expectations for consumption recovery, and social inventories of aluminum ingots are continuously destocking. Copper climbed alongside other base metals on higher demand outlook and lower inventories as Chinese officials stepped in to ease lockdown restrictions paving the way for economic growth.

We expect base metals to trade sideways to up with MCX Copper June support lies at Rs. 785 and resistance at Rs. 810. MCX Zinc June support lies at Rs. 327, resistance at Rs. 345. MCX Aluminium June support lies at Rs. 231 with resistance at Rs. 243.