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Commodity market Forecast

By Mr. Vivek Gupta, CMT – Director Research, CapitalVia Global Research Limited

New Delhi: Gold saw good drop last week with Comex and MCX markets saw a fall over 1.5% and over 2% respectively. Higher drop locally was on account of lower spot demand and Rupee appreciation. Weaker demand in Indian also resulted into under performance in October contract as equated to far month. Herein we should look at major factors which could continue to play negative on gold. Euro tumbled to multi year lows last week after ECB slashed interest rate by 0.1% across the board as inflation and growth remained a concern. Last week, we saw mostly better data from US though Monthly Jobs numbers disappointed. However despite the bad reading, broader markets expect this might be just a one-off event and not a trend thus we feel pressure on gold to continue. Backed by these aspects over broader optimism in the US economy, consistently surging equity markets and also looking at the rising US Dollar, we maintain our bearish stance on the commodity and look to sell the same on pull-backs next week.

Over all, MCX Gold October future is in bearish trend and sustaining around lower levels. For the coming week 26300/26000 will act as a major support whereas 27200/27500 will act as a major resistance level in MCX Gold October future. For the next week in MCX Gold, trader can use sell on higher level strategy, if MCX Gold October future sustains below the levels of 26800 then it could test the levels 26600/26300.

Technically, MCX Silver December futures is in bearish trend and sustaining around lower level from last couple of the week. For the coming week 41500/42900 will act as a major resistance levels where as 38400/37000 will act as major support in MCX Silver December futures. For the next week in MCX Silver futures, traders can use sell on higher level strategy, if MCX Silver December futures sustains below 40800 then it could test the levels of 39500/38400.

Energy:-

 Crude oil futures rose on Friday, amid speculation the commodity's drop to multi-month lows on Thursday was excessive as the announcement of a fresh round of sanctions against Russia lent support. On the New York Mercantile Exchange, U.S.crude oil for delivery in October traded at $93.24 a barrel during European afternoon trade, up 0.44%.Prices jumped 1.27% on Thursday to settle at $92.83. We expect crude oil prices to remain in range for the week as stronger dollar and sufficient supplies can keep the prices in range.

For the coming week 5600/5350 will act as major supports levels whereas 6000/6200 will act as major resistance in MCX Crude oil September futures. For the next week, trader can use buy on lower level strategy, if MCX Crude September future sustain above 5700 levels then it could test the levels 5820/5990.

Base Metal:-

Entire metal complex trade down this week. We saw its prolonged effect. We talk about copper it headed for a third weekly drop due to signs that china’s economy is likely to weaken further. We have to be actually cautious today about each especially when we have the industrial production number from major consumers of metal in the world. Therefore, volatility is very much likely today. Since, the recent trend have been bearish, we wish to maintain the same stance barring a few like nickel. For remaining we hold a bearish outlook on today’s trading session.

Trend of MCX Copper November future is in consolidation and also sustaining in range. For the coming week, it could face major resistance of 428/442 whereas 392/380 could be a major support in MCX Copper. For the next week trader may follow sell on higher levels strategy, if MCX Copper November future sustain below 417 levels then it could test the level of 405/392.

About Sanjay Trivedi

Sanjay Trivedi is honorary editor of Asia Times. He is senior Indian Journalist having vast experience of 25 years. He worked in Janmabhoomi, Vyapar, Divya Bhaskar etc. newspapers and TV9 Channel as well as www.news4education.com. He also served as Media Officer in Gujarat Technological University.

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