By Mr. Saumil Gandhi, Senior Analyst - Commodities, HDFC Securities.
Gold prices traded slightly lower on Monday, with the spot gold price at Comex trading down by 0.05% at $1923 per ounce. While the gold October future contract at MCX is trading lower by 0.11% at Rs 58872 per 10 grams.
Gold prices stuck in a range amid mixed fundamentals. Strength in the dollar index following recent strong US macro data and hawkish remarks from FOMC policy weighed on gold prices. While Chinese economic concern provided a haven, demand for gold provided support at a lower level. The US dollar index registered its 10th consecutive weekly gain in the previous session and is currently trading at 105.25, up by 0.09% against the previous close.
We anticipate that economic data and geopolitical events will shape market sentiment this week. US consumer confidence data, core durable goods, quarterly GDP figures, and FED Chair Powell's speech will be closely monitored by inventors, with the week ending with PCE price index data. Technically, Comex gold has immediate support at $1901; until price holds above this level, recovery is likely to see a move towards the $1950 level. The MCX Gold (December) contract is expected to move in a price range of Rs. 58,750 to Rs. 59,900.
Crude oil prices retreated on Monday amid mixed fundamentals, with benchmark NYMEX WTI crude oil trading down by 0.24% at $90.05 per barrel against the previous close. The Federal Reserve's hawkish stance and Russia's temporary fuel export embargo have significantly influenced crude oil prices recently. With the northern hemisphere winter approaching and global diesel markets already tight, Russia has banned exports of the fuel that's used for transportation, heating, and industrial processes, making the oil market more vulnerable.
Meanwhile, money managers have increased their bullish Brent and WTI oil bets by 27,459 combined net-long positions to 522,347; the net-long position was the most bullish in more than 18 months.
In crude oil, the short-term chart's RSI indicator has touched into the over-bought zone, while the long-term technical chart continues to be up. Therefore, we anticipate that the short-term outlook for crude oil will be sideways to bearish, but the long-term outlook for crude oil is expected to be bullish. MCX crude oil October future has resistances at 7795/7900 and support at 7250. NYMEX WTI crude has support at $87.50 and resistance at $93.40 for this week.
Base metals prices declined on Monday due to a strong US dollar and economic concerns in China, the world's largest metals consumer. LME Copper sank to its lowest since May in the previous week following a weak demand outlook from China, and copper stocks held on the LME registered warehouse have more than doubled in the space of two months.
The Chinese property sector and global macroeconomic conditions will determine base metals' future direction in the long term. In the short term, we believe base metals are likely to correct further this week, and demand from China is expected to be subdued before the long public holiday.
The MCX Copper October future has support at 701 and resistance at 729; the price is expected to trade in this range, while the MCX Zinc is anticipated to move in the range of 233 to 221 for the upcoming trading session.