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Gold, Silver Move In Range-Bound, Base Metals Trading On Optimism

Author: SMC Global Securities/Wednesday, January 27, 2021/Categories: Exclusive

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Gold, Silver Move In Range-Bound, Base Metals Trading On Optimism

Bullion counters may continue to trade with bullish bias where Gold may find support near Rs48,900 per 10gm and facing resistance near Rs49,400, while silver may trade with higher volatility where it may find support near Rs66,800 per kilogram and facing resistance near Rs67,290. Gold prices are recovering from a sharp decline in the previous session, as investors hoped that a massive economic stimulus would be passed soon in the United States to revive the world's largest economy. The Joe Biden administration and Democratic and Republican lawmakers discussing a new $1.9 trillion in coronavirus relief agreed on Sunday that the most important priority should be producing and efficiently distributing a vaccine. Global coronavirus cases rose to more than 98 million as countries continued to work on the pace of vaccinations. Demand for physical gold picked up last week as the approaching Chinese New Year encouraged buyers in China and Singapore. Holdings of the world's largest gold-backed exchange-traded fund, SPDR Gold Trust GLD, eased 0.07% to 1,173.25 tonnes on Friday. The US Senate Finance Committee on Friday unanimously approved Janet Yellen's nomination as the first woman Treasury secretary, indicating that she will easily win full Senate approval on Monday.

Base Metals
Base metals may trade with bullish bias where Copper can move towards Rs610/kg and taking support near Rs604. Copper prices fell on demand worries due to rising coronavirus cases in top consumer China and ahead of seasonally slow consumption during the Lunar New Year holiday. Three-month copper on the London Metal Exchange (LME) fell 0.2% to $7,985.50 a tonne, while the most-traded March copper contract on the Shanghai Futures Exchange dipped 0.1% to 59,020 yuan ($9,100.44) a tonne. China reported a climb in new Covid-19 cases driven by a spike in infections among previously symptomless patients in northeastern Jilin province, risking wider lockdowns that would undermine industrial activity. Zinc (Feb) may move towards Rs217 per kg and taking support near Rs214. Lead can move towards Rs164/kgm while taking support near Rs161. Nickel trade with sideways to bullish bias where it may take support near Rs1,318 per kilogram and resistance near Rs1,340. Meanwhile, copper demand growth has slowed as imports have levelled off ahead of the Chinese New Year holiday in February when many factories close. World aluminium output rose by 2.5% to a record 65.3 million tonnes in 2020, with producers lifting run-rates as the aluminium price rebounded from its March lows. World aluminium output rose by 2.5% to a record 65.3 million tonnes last year, with producers lifting run-rates as the aluminium price rebounded from its March lows. Aluminum may move to Rs165 per kg, while taking support near Rs161. LME aluminium fell 0.1% to $1,992.50 a tonne, nickel rose 0.4% to $18,350 a tonne and zinc CMZN3 declined 0.2% to $2,711 a tonne.

Crude Oil
Crude oil may trade with sideways to bearish bias where support is seen near Rs3,770 per barrel and resistance is seen near Rs3,860. Oil prices slipped for a second straight session on January 25 as renewed Covid-19 lockdowns raised fresh concerns about global fuel demand. Brent crude futures for March fell 15 cents, or 0.3%, to $55.26 a barrel, while US West Texas Intermediate crude for March was at $52.19 a barrel, down 8 cents, or 0.2%. Signs of weaker demand weighed on the market, pointing to lockdowns in Hong Kong, China and possibly France as Covid-19 cases rise, restricting business activity and fuel consumption. China reported a climb in new Covid-19 cases on Monday, casting a pall over demand prospects in the world's largest energy consumer, the main pillar of strength for global oil consumption. Prices came under further pressure after data from the US Energy Information Administration showed US crude inventories surprisingly rose by 4.4 million barrels in the week to January 15, versus expectations for a draw of 1.2 million barrels. The number of oil and natural gas rigs added by US energy firms rose for a ninth week in a row in the week to January 22, but are still 52 per cent below this time last
year, data from Baker Hughes showed. Some support for prices has come in recent weeks from additional production cuts from the world's top exporter, Saudi Arabia. But investors are watching for a resumption of talks between the United States and Iran on a nuclear accord - which could see Washington lifting sanctions on Tehran's oil exports, boosting supply. Natural gas may trade with higher volatility where resistance is seen near Rs183/mmBtu and support near Rs177. Natural gas futures declined as, pressured by a drop in cash prices as forecasts continued to call for warmer temperatures over the near-term, leading to predictions of lighter heating demand.

SMC Global Securities Ltd

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