Gold and Crude Oil - June 16, 2022 - HDFC Securities

Mr. Tapan Patel, Senior Analyst (Commodities), HDFC Securities.

Gold prices traded steady with spot gold prices at COMEX were trading near $1833 per ounce on Thursday. Gold Aug future contract at MCX were trading 0.50% up near Rs. 507050 per 10 grams by noon session.

Gold prices held strong post US FOMC rate decision where FED hiked key interest rates by 75 bps, the largest since 1994. The weaker dollar and fall in US bond yields pushed bullion prices higher on economic growth worries. The Fed Chair Jerome Powell said the central bank will deliver another big hike in July, but "today's 75 basis-point increase is an unusually large one and I do not expect moves of this size to be common." We expect gold prices to trade sideways to up for the day with COMEX spot gold support at $1810 and resistance at $1850 per ounce. MCX Gold Aug support lies at Rs. 50300 and resistance at Rs. 50900 per 10 gram.

Crude Oil prices traded higher with benchmark NYMEX WTI crude oil prices were trading 0.42% up near $115.80 per barrel. Crude oil prices recovered on Thursday from a steep drop in the previous session, supported by tight oil supply and peak summer consumption, after a U.S. rate hike sparked fears of slower economic growth and less fuel demand. The US crude production, which has been largely stagnant over the last few months, edged up 100,000 barrels per day last week to 12 million bpd, its highest level since April 2020. We expect crude oil prices to trade sideways to down with resistance at $119 per barrel with support at $112 per barrel. MCX Crude oil July contract has important support at Rs. 8750 and resistance at Rs. 8980 per barrel.