Outlook for week: Gold, energy, base metal

Updated: May 24 2014, 21:10pm hrs
GoldGold price eased in Asia on Friday with demand prospects from China and India in focus.
Precious metal: Gold price eased in Asia on Friday with demand prospects from China and India in focus. A pick-up in Chinese manufacturing in May - though still below expansion territory - and a new government in India may bode well for demand from the world's top two gold importers. On Wednesday, the Federal Reserve released the minutes of its April policy meeting, which revealed the U.S. central bank plans to continue tapering its monthly bond-buying program and rely on other tools to normalize monetary policy, though actual rate hikes won't come after considerable period of time. We expect Gold prices moved in range as investor an eyes on US home sales data and the positive demand from China can also support the prices.

Over all, MCX Gold June future is in consolidation and sustaining around lower levels. For the coming week 26600/26100 will act as a major support whereas 27500/27950 will act as a major resistance level in MCX Gold June future. For the next week in MCX Gold, trader can use sell on higher level strategy, if MCX Gold June future sustains below the levels of 27000 then it could test the levels 26850/26600.

Technically, MCX Silver July futures is in consolidation and sustaining around lower levels. For the coming week 41660/42900 will act as major resistance levels where as 38000/36500 will act as major support in MCX Silver July futures. For the next week in MCX Silver futures, traders can use sell on higher level strategy, if MCX Silver July futures sustains below 40500 then it could test the levels of 39365/ 38000.

Energy: Crude oil futures edged higher on Friday, as globally positive U.S. data on Thursday fuelled optimism over the strength of the country's economic recovery, while markets eyed a report on U.S. homes sales data. Investors also continued to focus on developments in Ukraine, where presidential elections were scheduled to take place on Sunday May 25. U.S. and European officials have already warned that Russia would face additional sanctions if Moscow disrupts the upcoming elections. We expect Crude oil prices moved down further as upcoming data from US and reducing tensions in Ukraine can push the Crude prices down. For the coming week 5850/5600 will act as major supports levels whereas 6200/6500 will act as major resistance in MCX Crude oil June futures. For the next week, trader can use sell on higher level strategy, if MCX Crude June future sustain below 6050 levels then it could test the levels 5970/5830.

Base Metal: Copper prices edged higher on Friday, as expectations of demand from US and China following better than expected data from the world's two base metal consumer amid fall in inventories on the London Metal Exchange."Manufacturing data from US and China is supporting the base metal prices.

Minutes of the Federal Reserves April policy meeting published Wednesday indicated that the central bank continues to see a slow improvement in the economy, but reiterated that rates are likely to remain on hold at record lows for some time after its asset purchase program ends.

Trend of MCX Copper June future is in consolidation and also sustaining in range. For the coming week, it could face major resistance of 420/429 whereas 391/380 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 408 levels then it could test the level of 402.35/392.

By Vivek Gupta, Director Research, CapitalVia Global Research Limited