Gold prices are stuck in the 48,800-49,300 range as investors await US economic data, which is the consumer price index. If US inflation turns out to be higher than expected again, controversy over an earlier withdrawal of the US Federal Reserve from its over-expansionary monetary policy could flare up again, negatively impacting gold as bond yields rise in line with the US dollar. … The rise in commodity prices over the past few months is an ominous sign that inflation could be a problem. The momentum from speculative hedge fund positions has begun to wane as it is clear that profit-taking is taking place. According to the COT report, the purchase of gold has exhausted itself and the long-term accumulation has slowed to 2.9 thousand lots, which is a far cry from the 61.3 thousand lots that were bought net in the previous three weeks. The lack of new purchases in the past week may indicate that the initial demand has been met. In the MCX, gold has good support around 48,700 and any falls around this level should be used to go long with an expected target of 49,700 and a stop loss of 48,200.
July silver Futures bulls have an overall short-term technical edge. However, the nine-week uptrend on the daily histogram has stalled. Silver bulls need to close above 73,500 for the momentum to change from neutral to bullish. The next downside target for bears is to close below the solid support at 69,800, which is the June low, and this will open the door for bears to gain the upper hand. First we see resistance at 72,800 and then 73,500. Next support is seen at this week’s low of 70,500. Longs in silver have contracted in the second week and therefore we are seeing a lag compared to gold and we are more bullish on gold than silver.
Raw oil prices are trading higher on expected increases in demand as the economy opens, and US production is lagging behind pre-pandemic levels. The decline in US drilling and production leaves little competition to OPEC + ‘s efforts to manage markets. At the moment, OPEC + has no motivation to increase production more than planned. Therefore, he made no indication that new barrels might appear. OPEC + has confirmed its intention to increase its cumulative production by about 2 million barrels per day from July, but there is no talk of adding any additional production. Hedge funds increased their total net long crude oil 25.2k lots to 649.5k, a three-week high but still about 88k below their recent peak in February. OPEC’s optimistic demand forecast for the second half, coupled with the ability of OPEC + groups to control the price, helped push Brent above $ 70 (2-year high), while WTI hit levels last seen in 2018. We remain optimistic about crude oil prices. some drop should be expected, since prices have already reached a multi-year high, and a sharp profit taking cannot be ruled out.
Natural gas prices are up as refrigeration demand is expected to rise in line with the recent weather pattern. Demand for natural gas for refrigeration is expected to increase not only in the United States, but also in European countries. At the same time, we do not expect that from mid-June the volume of natural gas will exceed 236, we can see a wave of cold weather in the United States. It will likely remain volatile and we will see more sales if prices fall below 220.
Buy Nickel | TGT: 1,354 | Stop Loss: 1.287
Nickel formed a harami after the sharp red candle, indicating a weakening selling momentum. The next candles were green, indicating that buyers are planning some kind of comeback. Prices are touching the 50-day moving average and have now started trading above the 20-day moving average, which is a positive sign. We expect the momentum to continue to 1354, where nickel has sufficient resistance, as it failed to break through this level in May and June. Therefore, buy at the current price with an expected target of 1.354 and a stop loss of 1.287 at the close.
Selling copper below 730 | TGT: 710 | Stop Loss: 740
Since May, copper has reached support around 733 and 730. Prices have rebounded from these levels, indicating that buyers are protecting the area. As soon as this level is broken from below, we will see sellers gaining the upper hand. The trend for copper is neutral or negative as the RSI_14 is below 50. Prices are trading below the 20 DMA and just above the 50 DMA. We would recommend shorting the July contract below 730 for an expected move down to 710 and a stop loss at 740 at the close.
Disclaimer: Bhavik Patel is a Senior Commodities / Foreign Exchange Research Analyst at TradeBulls Securities. The opinions are personal.