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Metal Prices Shining On Demand Renewal

Author: SMC Global Securities/Thursday, March 4, 2021/Categories: Exclusive

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Metal Prices Shining On Demand Renewal

Base metals may trade with bullish bias where Copper(Mar) can move towards Rs706 per kg and taking support near Rs699. Base metals on both SHFE and LME declined across the board on March 1, 2021, as official data released over the weekend showed China’s manufacturing activity growth slowing in February. China’s official manufacturing Purchasing Managers’ Index (PMI) for February came in at 50.6, according to data released by the country’s National Bureau of Statistics over the weekend. That was lower than January’s reading of 51.3. The roughly 24 million tonne a year refined copper market is already in deficit and was undersupplied by  89,000 tonnes in the first 11 months of 2020, the International Copper Study Group (ICSG) said. Zinc may move towards Rs221/kg and taking support near Rs218. Lead can move towards Rs170/kg, while taking support near Rs168. As per International Zinc Association, Zinc consumption in India to grow by 14-15 per cent in 2021. Nickel trade with sideways to bullish bias where it may take support near 1360 and resistance near 1375. Largest Nickel producing country Indonesia has received an investment proposal from U.S. electric vehicle (EV) maker Tesla. Norilsk Nickel said it had partially suspended operations at its Oktyabrsky and Taimyrsky mines in Siberia because it had detected an inflow of water underground. Aluminum may move to 175 while taking support near 172. There have been continuous outflows from LME warehouses of over 5,000 tonnes per day of the light metal since mid-February.

Bullion
Bullion counter may trade with bearish bias where Gold may find support near Rs45,800 per 10 grams and facing resistance near Rs46,200, while Silver (May) may trade with higher volatility where it may find support near Rs68300 per kg and facing resistance near Rs69,200. Gold edged higher on March 1, recovering from an eight-month low touched in the previous session, as a weaker dollar lifted bullion's appeal. Spot gold rose 0.3% to $1,739.31 per ounce. US gold futures gained 0.4 per cent to $1,736.10. The US dollar slipped from a one-week high hit in the previous session, making gold cheaper for holders of other currencies. Bullion, however, posted its worst monthly fall since November 2016 due to rising US Treasury Yields, which increase the opportunity cost of holding non-yielding gold. US House of Representatives passed a $1.9 trillion coronavirus relief package on February 27. Speculators decreased their bullish positions in COMEX gold and silver contracts in the week to February 23, the US Commodity Futures Trading Commission (CFTC) said on Friday. Physical gold demand in India gained momentum last week as retail buyers and jewellers lapped up bullion at near eight-month low prices, while Singapore continued to see steady interest for both gold and silver. Silver gained 0.3 per cent to $26.71 an ounce.

Crude Oil
Crude oil may trade with sideways to bullish bias where support is seen near Rs4,570 per barrel and resistance is seen near Rs4,640. Oil prices rose more than $1 on March 1, 2021,  on optimism in the global economy thanks to progress in a huge US stimulus package and on hopes for improving oil demand as vaccines are rolled out. Oil prices are recovering this morning in line with most risk assets on the back of the US Stimulus Bill passing the House and as central banks continue to sabre rattle to ward off market-implied financial tightening. On the flip side, investors are betting that this week’s meeting of the Organization of the Petroleum Exporting Countries (OPEC) and allies, a group known as OPEC+, will result in more supply returning to the market. Natural gas may trade with higher volatility where resistance is seen near 208 and support near 201.

- SMC Global Securities

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The technical studies / analysis discussed here can be at odds with our fundamental views / analysis. The information and views presented in this report are prepared by Karvy Consultants Limited. The information contained herein is based on our analysis and upon sources that we consider reliable. We, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and we are not responsible for any loss incurred based upon it. The investments discussed or recommended in this report may not be suitable for all investors. Investors must make their own investment decisions based on their specific investment objectives and financial position and using such independent advice, as they believe necessary. While acting upon any information or analysis mentioned in this report, investors may please note that neither Karvy nor Karvy Consultants nor any person connected with any associate companies of Karvy accepts any liability arising from the use of this information and views mentioned in this document. The author, directors and other employees of Karvy and its affiliates may hold long or short positions in the above mentioned companies from time to time. Every employee of Karvy and its associate companies is required to disclose his/her individual stock holdings and details of trades, if any, that they undertake. The team rendering corporate analysis and investment recommendations are restricted in purchasing/selling of shares or other securities till such a time this recommendation has either been displayed or has been forwarded to clients of Karvy. All employees are further restricted to place orders only through Karvy Consultants Ltd. This report is intended for a restricted audience and we are not soliciting any action based on it. Neither the information nor any opinion expressed herein constitutes an offer or an invitation to make an offer, to buy or sell any securities, or any options, futures or other derivatives related to such securities.

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