Gold prices rebounded on Thursday from a near four-month trough but are still below its immediate resistance of $1,281. A couple of closes above these levels would indicate a possible bottom is in. Although, we look for higher prices in the future in the current environment, we are neutral and waiting.
The most recent Commitment of Traders (COT) report shows speculators cutting their net long position by a huge 49,000 contracts and the commercials cutting their net shorts just as dramatically. Gold’s falling price and declining open interest suggests selling pressure is subsiding. Strong dollar and positive economic data from US is keeping a lid on gold prices. Tomorrow if US Advance GDP comes positive, then we may again see gold crawling back towards $1,270 level.
Yesterday, crude oil prices saw some selling pressure after the Energy Information Administration (EIA) reported a build in crude oil inventories for the week to April 19. Saudi Arabia has stated that they are now willing to increase their production but may respond to customer needs if they want more oil. The technical picture shows crude is overbought, but open interest has begun to rise. This shows that buying pressure is still there and we may see shallow corrections only. Far contract of 2020 June NYMEX has come into backwardation against active month June 2019 NYMEX contract. Backwardation occurs when short-term supply concerns lift the price of a commodity for nearby delivery over the price for deferred delivery, so this is again bullish for crude oil prices.
TARGET: Rs 462
STOP LOSS: Rs 440
Trend of copper on a daily scale is looking positive at the higher top and higher bottom formation. It is trading in a range of Rs 440 - Rs 460. At present, it has taken support at its lower range of Rs 440 and now has started ascending to test its upper range of Rs 460 levels. Copper is trading above its short term moving an average of 13-EMA (exponential moving average) which again confirms the bullish trend. There is no divergence in RSI_14 oscillator so we would recommend long at the current level for an expected move till Rs 462 and stop loss of Rs 440 on the closing basis.
TARGET: Rs 157
STOP LOSS: Rs 148
Aluminium has made rounding bottom chart pattern on the daily scale and is one of the metals which has started outperforming after languish performance from January to March period. Aluminium is trading above its all important short-term moving average and clearly, RSI_14 shows there is more room for upside. Range breakout above Rs 150 has given fresh set of legs and we expect upside momentum to continue till Rs 157, so take long position with stop loss of Rs 148.
Disclaimer: The analyst may have positions in any or all the commodities mentioned above.