Precious Metals are trading on a positive note ahead of the key macroeconomic releases scheduled for the evening today. Gold futures are trading at 29430, up 83 or 0.28% whereas Silver is at 39391, up 0.22%.
Precious Metals recovered sharply from lows yesterday after setting up a false breakdown catching eager shorts on the wrong side. The focus will be on the key economic data releases today evening.
We have unemployment claims, durable goods report and consumer sentiment with claims dropping 9000 to 240,000 and durables good showing a respectable growth of 0.4% in October along with a slightly improving consumer sentiment.
A stronger report might see bullions come under selling pressure later in the evening today with increased chances of prices breaking below key support levels.
Technically, the immediate term trend still remains neutral given the lack of catalysts and quick short selling that emerges as prices rally to technical levels. Gold finds strong support at 29300 breaking which the focus turns to support at 29000 and possibly lower in the medium term whereas, on the flipside, resistance is seen at 29450 today.
Silver continues to struggle above resistance at 39000 and a daily close below this would call for a deep short-term correction in the white metal.
Base Metals are trading on a mixed note today but continue to remain within the broader consolidation range seen over the past few trading sessions. Aluminum is seen gaining a percent at 135.75 whereas Nickel is down 0.93% to trade at 759.60. Copper is up 0.16% to trade at 447.85 currently.
Copper has broken above a key resistance in the zone of 447-448 and a daily close above this level could indicate the resumption of the short-term upside in the metal. It is advisable to remain cautious as the base metals have had a considerable number of false breaks catching investors on both sides.
On the downside, a return below support at 446 would indicate a return to 435 support this week with the possibility of breaking lower to 430-425.
Nickel continues to trade above critical support at 730 and a breakdown below this level would not only push prices into a deeper corrective mode but also extend the time to recovery as the rest of the group recovers higher. We maintain a neutral view on base metals.
Crude Oil rallied sharply today missing the yearly highs by just a few points after the API reported that oil stocks may have dropped sharply in the previous week. MCX Crude futures are trading at 3759, up 81 points or 2.20% whereas Natural Gas is down 0.61% to 195.10 currently.
The American Petroleum Institute (API) reported earlier today commercial crude oil stocks held in the US may have dropped 6.35 mln along with a drop of 1.67 mln in distillate stocks for the week ending November 17. Gasoline stocks may have increased by 0.869 mln according to the report.
The oil market is delicately balanced on dropping oil stocks in the US and OPEC production cuts and reports confirming the supply depletion could prove to be a big boost to the market. The EIA report is expected to show a drop in both oil and gasoline stocks along with a small build in distillate stocks.
The market is also drawing support from the news that OPEC members may extend the oil production deadline beyond March when they meet in Vienna on November 30.
Technically, resistance is seen at 3765 and a daily above this should push prices to 3850-3900 in the short term whereas on the downside another break lower could trigger a second round of profit booking in the commodity.
Energy October 13, 2020