Gold and Crude Oil - Aug 23, 2023 - HDFC Securities
2023-08-23 16:37:37 (Time Zone: IST)
Mr. Saumil Gandhi, Senior Analyst - Commodities, HDFC Securities.
The spot gold price at Comex traded up by 0.24% to $1904 per ounce on Wednesday. While the gold October future contract at MCX is trading slightly lower by 0.10% at Rs 58515 per 10 grams. Domestic market gold prices erased earlier gains due to the strength of the rupee, which is up almost 0.25 paisa against the US dollar.
Gold prices stuck in a broader range as traders awaited a speech by Federal Reserve Chair Jerome Powell later this week. Meanwhile, investment demand remains sidelined in gold. Exchange-traded funds cut 45,476 troy ounces of gold from their holdings in the last trading session, bringing this year's net sales to 3.7 million ounces. This was the seventh straight day of declines.
We believe gold prices should consolidate at the lower end of the range with a moderately positive bias. Traders now look to more US macro data, including preliminary S&P Global Manufacturing PMI for August and New Home Sales Change for July, released later in the evening session. These datasets could provide volatility for precious metals. Comex spot gold has support at $1888 and resistance at $1912. The MCX Gold October future is expected to trade in a range of 58250 to 58780.
Crude oil prices declined further on Wednesday, with the benchmark NYMEX WTI crude oil trading down by 1.0% at $78.80 per barrel against the previous close. Recent decline in oil prices on the back of demand concerns. Traders evaluated the risk of slower Chinese demand against possible supply constraints. Additionally, traders are concerned that rising US rates may negatively affect oil demand in the US, the world's top oil user.
The US Energy Information Administration will release an oil inventory report later in the day. In the case of a bigger fall in stocks, a recovery in oil prices is expected. From a technical perspective, NYMEX WTI Crude Oil has support at $77.80 and resistance at $80.25. The MCX crude oil September contract has support at 6470 and resistance at 6680.