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Gold Hovering At Resistance Level; Copper, Zinc In Bearish Mode

Author: SMC Global Securities Ltd/Wednesday, February 3, 2021/Categories: Exclusive

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Gold Hovering At Resistance Level; Copper, Zinc In Bearish Mode

Bullion counter may trade with bearish bias where Gold may find support near Rs48,300 per 10grams and facing resistance near Rs49,100, while silver may trade with higher volatility where it may find support near Rs71,200/kg and facing resistance near Rs73,600. Silver prices fell more than two per cent on Tuesday as investors booked profits following a rally of as much as 11.2 per cent to a near eight-year peak in the previous session. Spot silver was down 1.7 per cent to $28.48 an ounce, having hit $30.03 on Monday, its highest since February 2013. Silver prices rocketed as retail investors, egged on by messages on Reddit, pile into the market in an attempt to push up prices. The US Commodity Futures Trading Commission (CFTC) is closely monitoring recent activity in silver markets, the agency's acting chairman said on Monday, as last week's volatility in securities markets spilled into trading of the precious metal. The retail investment frenzy in silver has left dealers from the United States to Singapore scrambling for bars and coins to meet demand. Spot gold eased 0.2 per cent to $1,856.86 per ounce. The US gold futures shed 0.3 per cent to $1,858.60. Top Democrats in the US Senate and House of Representatives filed a joint $1.9 trillion budget measure on Monday, in a step toward bypassing Republicans on Covid-19 relief before President Joe Biden met with Republican senators. India slashed import duties on gold and silver on Monday in a surprise move that industry officials say could boost retail demand and curtail smuggling. China's gold consumption fell by almost a fifth in 2020, the China Gold Association said.
Base metals may trade with bearish bias where Copper can move towards Rs590/kg and facing resistance near Rs596. Shanghai base metals fell for the most part as China’s Caixin manufacturing PMI eased in December while their LME counterparts set for a mixed start. The Caixin/Markit Manufacturing Purchasing Managers' Index (PMI) dropped to 51.5 last month, the lowest level since June 2020 and easing markedly from December's reading of 53.0. Copper slipped as manufacturing data from top consumer China raised the prospect of slowing demand growth, while a higher dollar prompted funds to cut bets on higher prices, though losses were capped by historically low inventories. Zinc may move towards Rs203 per kg and facing resistance near Rs207. Lead can move towards Rs159, while facing resistance near Rs163. Recent jumps in inventories in the LME’s warehouses are weighing on zinc prices. The global refined zinc market is expected to be in surplus of 463,000 tonnes in 2021, the International Lead and Zinc Study Group said. 
Nickel trade with sideways to bearish bias where it may take support near Rs1,285/kg and resistance near Rs1,307. In 2020, China’s imports of nickel pig iron from Indonesia, which can still be exported, rose 100.9 per cent year-on-year to 2.73 million tonnes. Aluminum may move to Rs159/kg, while facing resistance near Rs163. In FY20, there has been a 327 per cent increase in the imports of aluminium scrap from US into India compared to the levels in FY15.
Crude oil may trade with sideways to bullish bias where support is seen near Rs3,860 per barrel and resistance is seen near Rs3,950. Oil prices rose around one per cent on February 2 after major producers showed they were cutting crude output in line with their commitments on restraint, supporting a market thrown out of kilter by weak demand during the coronavirus pandemic. The Organization of the Petroleum Exporting Countries (Opec) crude production increased for a seventh month in January, as per a survey by Reuters. The Opec group and its allies agreed to ease supply curbs further, but the growth was smaller than expected. Opec was pumping 25.75 million barrels per day (bpd) in January, the survey found, up 160,000 bpd from December. Russian output increased in January, but in line with the agreement on reducing production, while in Kazakhstan oil volume fell for the month. Both countries are members of the Opec+ grouping that banded together to help support prices with production cuts. Natural gas may trade with higher volatility where resistance is seen near Rs211/mmBtu and support near Rs194. Natural gas futures soared over eight per cent on Monday as a major winter snowstorm battered the Northeast and with forecasts suggesting much colder weather and higher heating demand over the next two weeks than previously expected.

- SMC Global Securities Ltd

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