COMMODITY MARKET OUTLOOK- 17 May |Equity Research Lab|

COMMODITY MARKET OUTLOOK:-

commodity tips

GOLD

MCX  Gold  may  note  some  gains  tracking  cues  from  international  exchange.  COMEX  gold trades  higher  above  $1240/oz  supported  by  weakness  in  US  dollar  and  equity  market  amid political  concerns  in  US.  Concerns   about  US President  Donald  Trump  administration  rose amid  reports  of  intelligence  sharing  with  Russia.  Concerns  rose  further  as reports  noted  that Trump  asked  FBI  Director  James  Comey  in  February  to  drop  an  investigation  into  former National Security Adviser Michael Flynn. Mixed US economic data has also lent support to gold prices.  Gold may continue to trade  higher today on weaker risk  sentiment. Market  reaction to recent  development relating to  Trump will affect gold price. Support for MCX Gold June contract is seen at Rs.28050 while Resistance is seen at Rs.28300.

SILVER

MCX Silver may note some gains in line with international market. COMEX Silver trades higher near $16.9/oz amid  gains  in  gold  price  and  industrial  metals.  Weakness  in  US  dollar  has lent  support  to  commodities.  Mixed  US  economic data  and  concerns  about  Trump  administration  has  put  pressure  on  US  dollar.  ETF  inflows   also  show  buying  interest  in  silver.  Silver  along  with  gold  may  continue  to  trade  higher  today  in  safe  haven buying.  Support  for  MCX  Silver  July contract is seen at Rs.38500 while Resistance is seen at Rs.39300

CRUDE OIL

MCX  Crude  may  note  some  decline  tracking  cues  from  international  exchange.  NYMEX  crude  trades  weaker  today  but  in  a  narrow  range  above  $48  per  barrel.  Weighing  on  crude  price  is  API  weekly  report  which  noted  an unexpected  0.882  million  barrels  increase  in  US  crude  oil  stocks.  Also  weighing  on  price  is  weaker risk  sentiment  amid political concerns in US post reports of Trump intelligence sharing with Russia. Mixed US economic data has also dented demand outlook  for  crude. However, supporting price is weakness in US dollar and expectations 

that  OPEC may extend  production  cuts  beyond  2017.  Crude may remain  rangebound  to  negative  ahead  of   inventory report.  EIA  is  expected  to note  a  2.5  million  barrels  decline  in  US  crude  stocks  and  a  decline  in  gasoline  and  distillate  stocks.  Apart  from  stocks, focus will also be on US crude production and refinery demand. Support for MCX Crude May contract is seen at Rs.3060 while Resistance is seen at Rs.3135.

COPPER

MCX Copper may witness choppy movement today tracking range bound in international exchange. LME Copper  trades in a narrow range today following flat close yesterday. On positive note supporting prices is weakness in  US Dollar along  with recent  drawdown  in  stocks  at exchange  warehouses Copper  stocks  at  LME  fell  by  2650 tonnes  yesterday. However growth worries in top consumer China along  with weakness in equity markets may cap the upside. We expect the  metal  to  note  range  bound  movement  today  amid  mixed  cues  however  overall bias  remains  weak.  With  no  major data  due  from  US  today  focus  will  be  on  movement  in  US  Dollar  and   equity  markets.  Support  for  MCX  Copper June contract is seen at Rs.357.5 while resistance is seen at Rs.365.5. 

Natural gas

MCX  Natural  gas  may  note  some  gains  tracking  cues  from  international  exchange.  NYMEX natural  gas inched  up  after  a  sharp  3.6%  slide  yesterday.  Weighing  on  price  is  forecast  of  mild  weather  in  US  over  next  few  days  which will keep a check on demand. However, supporting price is expectations  of  another smaller than average gain in  gas stocks. US EIA weekly report is expected to note a 60 Bcf rise in  gas stocks as against 5-year average increase of 87 Bcf.  Natural  gas  may  remain  choppy  today  amid  mixed  cues  but  we  could  see  some  gains  ahead  of  inventory  report. Support for MCX Natural gas May contract is seen at Rs.203 while Resistance is seen at Rs.212.

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