Commodities outlook: Gold price expected to move higher

Written by vivek gupta | Vivek Gupta | Updated: Mar 16 2014, 22:10pm hrs
Gold priceTension in Ukraine and Chinese economic data likely to impact gold price further. (AP)
Precious metal:Gold prices moved higher marginally by 0.14% yesterday as tensions in Ukraine and worries over China continued. Russia launched new military exercises near its border with Ukraine, showing no sign of backing down despite a stronger than expected drive for sanctions from the EU and United States. Gold prices are expected to move higher for the week over increasing tensions in Ukraine and over poor Chinese economic data came yesterday.

Over all, MCX Gold April future is in consolidation and sustaining in range. For the coming week30280/29900will act as a major support whereas 31160/31500 will act as a major resistance level in MCX Gold April future. For the next week in MCX Gold, trader can use buy on lower level strategy, if MCX Gold April future sustain above the levels of 30660 then it could test the levels 30850 / 31160.

Technically, MCX Silver May futures is consolidate and sustaining around higher levels. For the coming week 50400/52165 will act as major resistance levels where as 46000/44900 will act as major support in MCX Silver May futures. For the next week in MCX Silver futures, traders can use buy on lower level strategy, if MCX Silver May futures sustains above 47500 then it could test the levels of 48700/ 50392.

Energy:US Crude oil prices moved higher marginally after the previous fall over higher inventories and surprise action by US. For the week, the contract has lost 4.3 percent, after the U.S. government surprised marketson Wednesday by announcing a test release from its strategic petroleum reserve. Poor Chinese industrial production data yesterday impacted Crude oil prices as worlds one of the largest Crude consumer is seen moving down. India reduced its Iranian oil imports resulting in fall in Oil imports by 36% in Feb against January. We expect Crude Oil prices to move in range for the week, tensions in Russia can also support the prices over fear of supply glitch.

For the coming week 5700/5500 will act as major supports levels whereas 6130/6320 will act as major resistance in MCX Crude oil April futures. For the next week, trader can use sell on higher level strategy, if MCX Crude April future sustain below 5982 levels then it could test the levels 5850/5700.

Base Metal:Copper prices in London, Shanghai and US fell down further as China reveals a poor industrial production data. Industrial production in China moved down to 8.6% vs 9.7% prev. Growing jitters about the financial health of bloated industries in China have prompted many banks to cut lending in these sectors by as much as 20 percent. Stronger dollar internationally also pushed the Copper prices down. We expect copper prices to move down further over poor Chinese data has increased the worries over Chinese economy.

Trend of MCX Copper April future is in consolidation and also sustaining around lower levels. For the coming week, it could face major resistance of 408/420 whereas 385/373 could be a major support in MCX Copper. For the next week trader may follow sell on higher levels strategy, if MCX Copper future sustain below 399 levels then it could test the level of 393/385.

By Vivek Gupta, CapitalVia Global Research Limited