Base metals may extend gains; farm futures mixed

Bullion and crude oil prices are likely to trade in a range with a positive bias next week, while base metals are likely to extend last week’s gains.

Farm commodities on the National Commodity and Derivatives Exchange (NCDEX) are expected to trade mixed. Guar and edible oil complex may trade firm, while chana, chilli, and turmeric may trade with a negative bias.

Bullion, base metals
Precious metals are expected to trade range-bound with a positive bias, tracking mixed sentiments in the dollar index.

On COMEX, silver stocks fell 0.6 per cent on weekly basis, which shows the metal is gaining from increased physical demand.

Further, a sharp rise in US Treasury yields will lead to inflationary concerns, which is also seen increasing the appeal of yellow metal as a hedge against inflation.

Likely appreciation of the rupee against the dollar may curtail the upside in bullion prices. Analysts said gold prices have crucial resistance at Rs 15,000 per 10 gm, whereas silver futures could test Rs 24,500 a kg.

Next week, base metals on the London Metal Exchange (LME) are seen extending their gains from last week on optimism over economic recovery following better-than-expected data, firm equity markets, and likely drawdown in LME warehouse inventories.

Likely decline in the greenback against the euro is also seen supporting prices, as a weakening dollar will make dollar-denominated commodities cheaper to buy.

Three-month copper futures may touch crucial psychological resistance of $5,500 a tonne next week.

However, the rally may not be sustainable, as likely profit booking at higher levels may weigh on prices.

On MCX, base metals will continue to move in line with benchmark futures on LME. The rupee’s movement against the dollar will play a key role in setting the price trend in the domestic market.