Gold, Crude Oil and Base Metals - April 10, 2023 - HDFC Securities

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

Gold prices edged lower on Monday, with spot gold prices at Comex were trading down by 0.59% at $1997 per ounce. Gold June future contract at MCX were trading down by 0.41% at Rs 60265 per 10 grams by noon session.

Gold prices resumed trading on Monday with negative bias as Friday's US job data rises odds of fed rate hike. Labor Department data on Friday showed that US nonfarm payrolls increased by 236,000 jobs last month, against market estimated by 238,000. While Unemployment rate fell to 3.5% from 3.6% in the previous reading. After the Job report heightened expectations the Fed will raise rates at its next meeting, with the market pricing in a 63.4% chance for a 25-basis point rate hike, up from 49.2% on Thursday. Higher interest rate scenario negative for non-yielding metals. Technically we expect Comex Spot gold prices should correct further to $1960 per ounce. For the week Comex spot gold having supports at $ 1960/1935 per ounce and resistance at $2030/$2055 per ounce. MCX Gold June future having support at Rs 59080 per 10 gram and resistance at Rs 61300 per 10 grams.

Crude Oil prices steady with benchmark NYMEX WTI crude oil were trading slight up by 0.09% at $80.75 per barrel on Monday. Crude oil price traded with in limited range as last week OPEC+'s surprise decision has boosted bullish sentiment on prices while recent US macro data indicators are showing signs of weakness and slowdown concerns persist. Meanwhile, geopolitical tensions in the Middle East are abating as top diplomats from Saudi Arabia and Iran meet to continue mending relations, de-escalating a decades-long rivalry that's fueled proxy wars and rattled oil markets.

We expect bullish momentum will continue in crude oil until NYMEX WTI crude oil price trade above $75.70 per barrel. This week investor focus will be on release of OPEC and IEA monthly report which could through light on further demand supply scenario. NYMEX WTI Crude oil prices face resistances at $84.70/$87.80 per barrel and find supports at $75.70 per barrel. MCX Crude Oil April future having supports at Rs 6370 and resistances at Rs 6840 for this week.

Base metals prices witnessed correction amid ongoing concerns about global economic growth after serious of weak macro data from US however the fall was constrained by support from low inventories. After a bullish start to 2023, metals have slipped from their late-January peak amid growing fears of a US recession and an uncertain recovery in China. Last week Manufacturing data in the US and China is fueling concerns about the global economy, which is facing headwinds from tighter monetary policy. Data from the broad-based Caixin Manufacturing PMI showed that Chinese factory activity unexpectedly fell in March.

We expect Base metals price should consolidate in lower range and selling pressure will likely to see at higher level. MCX Copper April future likely to trade within natural range of 750 to 787. Having strong supports at Rs 759/750 per kg and resistances place at Rs 780/787 per kg for the week.