Gold is stubbornly holding on to the levels of $1450 and any sustained breach with volume can crash the prices till $1430. Volatility is high in precious metals as they are chasing the headline news of US-China trade talk. Non-Farm Payroll data will be next trigger for precious metals. The next resistance is $1489 and $1500, while in MCX it is Rs 38600-38650. On downside, there is strong support at Rs 37500, while the immediate support is at Rs 38000. The best time to buy gold and silver seasonally is mid-December to late February. During the past five years, gold and silver have seen a good upside over this 10-12 week span.
Crude oil gained yesterday after US inventory reported more-than-expected withdrawals. Crude oil is waiting for OPEC meet outcome, which will be the next trigger. The oil minister of OPEC’s second-largest producer, Iraq, said on Sunday that the OPEC+ coalition would discuss cutting another 400,000 bpd to deepen the production restrictions to a total of 1.6 million bpd. There are three scenario for OPEC 1) OPEC+ decides to take no action at this time potentially leaving a decision for March next year. 2) Roll over the cuts as is or 3) extend the deal and deepen the cuts. For Brent to break levels of stiff resistance of $65-$67.5, the final scenario is needed. The resistance for crude oil comes at Rs 4220-4250, while support comes at Rs 4100.
Buy Zinc: TGT Rs 190; Stop loss: Rs 180
Zinc has made a double-bottom at Rs 180 on October 3 and December 3. In December, Zinc made a ‘hammer’ candlestick pattern, which suggest reversal and a follow up candle showed buying strength. LME Cancelled warrant has also increased suggesting more upside. Base metals are nearly at the bottom-end of the cycle and waiting for any positive news from US-China trade war front to gather momentum. RSI_14 is neutral with no divergence. One can buy Zinc with target of Rs 190 and stop loss of Rs 180.
Buy Silver near Rs 43,900; TGT: Rs 45,500; Stop loss: Rs 43,300
Silver is stuck in range of Rs 43900-45000 since two months and we expect high volatility soon. The previous metal has taken multiple supports near Rs 43900-44000. This is the level where we would recommend going long with target of Rs 45500 and stop loss of Rs 43300.
Disclaimer: Bhavik Patel is a senior technical analyst (Commodities), Tradebulls Securities. He may/ may not hav positions in the commodities mentioned above.