The week went in the name of MCX Gold as it managed to cross the psychological figure of 35,000 levels after India’s first female FM Nirmala Sitharaman come up with an increase in custom duty on precious metals from 10% to 12.5% that triggered the buyers to add long positions. The precious metal initiated the week on a negative note as the counter was going through the phase of long liquidation after it made a high of 34,892 levels. But the formation of ‘Bullish Harami’ candle stick on daily scale was enough to counter the correction and precious metal resumed its rally with a gap up opening on Wednesday. Later, on Friday, MCX Gold failed to sustain over 35,000 levels due to healthy Nonfarm Payrolls numbers as it advanced to 224K and faded the hopes of Fed rate cut.
On daily scale, MCX Gold is failing to sustain above the 1.272% Fibonacci Extension that is placed at 34,692 levels. MACD is signaling signs of exhaustion in bull trend and a bearish crossover of fast and slow Moving Average. RSI has been bounced back after getting support from 60 levels and expected to continue with its uptrend. Next week, we are expecting a continuation of uptrend as a break above 34,700 levels would activate more buyers for a target of 35,150 and 35,600 levels respectively. While on global upfront, Core CPI data that will release on July 11, 2019 by U.S. government will guide the direction of the precious metal next week.
MCX Crude Oil
MCX Crude Oil remained in the grip of bears last week due to lack of fundamental developments and formation of twin ‘Doji Star’ candle sticks on daily scale as the market participants were indecisive for the next move on account of Crude Oil inventories data that is revealed by Energy Information Administration. Less than expected fall in the crude oil inventories by 1.085 million barrels, fear of economic slowdown due to continuous supply cuts by OPEC in order to curb the demand and sensing resistance from 200 days Simple Moving Average were enough to activate sellers in the counter and the black gold erased almost 4% on Wednesday. The greenback government reported that the U.S. stockpiles now stand at 468.517 million barrels on June 28. The black gold had traded in a narrow range of 3859-3960 levels in last trading sessions.
Next week, we are expecting a continuation of bearish trend as the counter is forming Darvas’s box on lower time frame that signals for a continuation of the primary trend after some consolidation. Potential supports are placed at 3,806 and 3,737 levels respectively. The index is closed below 200 days Exponential moving Average. RSI is closed at 48.49 levels showing a little consolidation with negative bias. Stochastic oscillator is continued with its bearish crossover.
MCX Natural Gas
MCX Natural Gas initiated the week with a negative tone on Monday due to lack of fundamental developments and the counter was continued with its bearish mode on Monday but performed lackluster later as the hot US pattern through Saturday with highs of upper 80s to lower 90s was likely to push upside the overall demand as per NatGas weather was enough to freeze the falling prices. The counter got some strength after Energy Information Administration reported a net increase of 89 Billion cubic feet from the previous week making it total stockpiles of 2,390 Bcf in storage that activated the buyers and a break above 164.10 levels triggered the formation of ‘Bullish Harami’ candle stick pattern on weekly scale in Friday’s session and the counter closed at 167.20 levels.
On daily scale, the counter seems to be retraced from 50 days Simple Moving Average consecutively and closing above that could only trigger for uptrend to remain intact. MACD has given a bullish crossover as the 12-period EMA is crossed above 26-period EMA after forming a Bullish divergence. Next week, we are expecting a break above the psychological resistance of 170 levels will push it to a high of 175 and 180 levels respectively.