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Gold and Crude Outlook: 13-06-2016

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Gold and Crude Outlook: 13-06-2016
June 14
07:06 2016

Nifty on Friday closed at 8170. Profit booking started Thursday onward and continued on Friday also. European and US markets were also witnessed profit booking and Euro zone markets closed at two weeks lows.

Going forward markets is likely to witness proft booking and it may test key support levels. Nifty has support at 8150 and 8100, if Nifty moves down below these two levels then it may test 8049.  Resistance for the Nifty lies at 8250 and 8400.  In the near term market may witness minor corrections but due to the strong monsoon price declines can be utilized to enter for a long term.

On Friday after hours IIP came out, which was below street expectation at -0.8% vs 0.1% in March.  Nine out of the twenty two industry groups in the manufacturing sector have shown negative growth during the month of April 2016 vs same period in the previous month.  The electricity and machinery & apparatus showed the steepest decline. IT and Pharma sector would continue to remain under pressure in the next week.

Investors should take precaution ahead of June 23, one should trim both long and short positions to get a clear picture. Dow Jones is still looking bright and it has strong supports at 17641 and 17341 and it has resistance at 18162 and 18550.

PSU Banking Index has yet to give a sell signal but it is having support at 2400 and 2358 and has resistance at 2645 in the short term.  On the other hand Nifty Bank is showing weak momentum and it has having support at 17584 and 17313 and it has resistance at 18353.  So we can assume that minor corrections on the first days of the next week, but recovery can be expected in the later period of the week.  On Friday US S&P volatility shot up by around 11% further supporting the volatility in the market.

As expected gold recovered from the lower levels and it is likely to move up further towards $1287 and $1300 and the yellow metal commodity has support at $1257 per troy ounce. Fresh flow of money will enter into precious metals and base metal segment. Crude is still hovering at around $50 and likely to breach $52.75 in the near term and it has support at $47.20 and $46.10 per barrel.

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ALEX MATHEWS

ALEX MATHEWS