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Commodity Market Round-Up: Scenario of Gold, Crude Oil as Base Metal Falls

Uploaded Date 18-Aug-20
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Present Scenario of the Commodity Market Which Every Investor Should Know

Investing in the commodity market is a tricky affair? Isn’t it? Well, seasoned investors who are already into commodity trading won’t need any commodity tips from professionals. However, this can’t be said for the new players who just entered the commodity market. Well, they need to know the risks, as well as the golden rules associated with commodity trading. This, in turn, would help them to mitigate risks, make good investments, and earn enough profits.

Now, new investors can easily get acquainted with the commodity market. Thanks to the initiatives taken by trading professionals and financial advisors. Well, the team working with Shyam Advisory is very professional. They study and research the commodity market round the clock and will come up with accurate tips, which if followed by the investors properly would help them to earn profitable returns.

Commodity Market

Well, the commodity market doesn’t need any introduction to old investors but for the new investors, the market is completely a new one. For them, the commodity market can be defined as a market place where the trading of two types of commodities takes place.  

The two types of commodities which an investor should know are:

Agri-Commodities: It is also known as soft commodities and it includes products, like wheat, corn, coffee, rice, soybean, and so on.

Non-Agri Commodities: It is also known as hard commodities. It involves, buying, selling, and trading with base metals, bullion metals, and energy. Base metals include copper, lead, nickel, zinc, aluminum; whereas bullion metals include gold and silver. 

Basics of Commodity Trading 

Most investors might not be aware of the fact that in India MCX is one of the largest MCX commodity derivatives exchanges. Hence, in India, commodity trading for both hard and soft commodities takes place through MCX. To invest or trade in any kind of commodities through this exchange, an investor or trader needs to learn various investing/trading ways. As a part of important MCX tips, an investor/trader shouldn’t forget to go for future contracts. Well, future contracts can help any investor or trader to sell their commodities on the agreed price; however, the payment is done on a future date.

Commodity trading is getting very popular. The best way to invest in this market and especially on hard commodities is through futures contracts. Even market experts and financial advisors like MCX Advisory are stating that future contracts form the most profitable way of investing in commodities. The reason is simple. Future contracts mitigate risks; at the same time, it offers a great profit.

In this regard, market experts are doing their best to present the current market scenario in front of the investors before they invest in any commodity. However, investors/ traders need to follow all MCX tips properly.

Commodity Market Scenario

Market advisory professionals would love to point out the situation as unfurled in the commodity market on 10th August 2020.

Except for base metal block, which traded in the red zone, other commodity section witnessed some gain. For instance, on Monday (10th August) gold went up by 0.38%; whereas, silver gained 1.22%. However, the base metal section witnessed a slight drop. In fact, amidst the tension brewing between the US and China, investors saw that crude oil went up by 1.36% and natural gas went up by 0.59%.

After listening to the suggestion of advisory professionals like Shyam Advisory, many investors traded in gold futures. Well, investing in gold at this moment is ideal. Why? Going by the ongoing tension among China- the US and with the steep rise in the COVID cases, gold is being considered as a safe haven by many. Being a safe haven, the price of gold would go up and it won’t face a downfall.

Well, the situation might seem favorable for gold but it’s not the same for other commodities. Let’s see what the future this market holds.

Investors don’t need to worry even if the market is a bit volatile. By following the commodity tips of experts, they would be able to trade properly in the commodity market.

Base Metals

Gold

Market analysts are pointing that it’s the right time to invest in gold. It works as a hedge against market volatility. Gold is continuing to move towards the high, due to many reasons. Some reasons are weakness in the US dollar, a strong interest of investors, low bond yields, geopolitical tensions, a safe haven amidst the rising number of cases worldwide. One thing which market analysts want to point that rally in the yellow metal is not only for its liquidity factor. Well, investors are lacking the confidence to invest in other assets. Hence, they are looking forward to commodity gold tips before investing in this yellow metal.

Well, investors can take a look into the market scenario of 12th August 2020. If the technical chart of MCX Gold October is taken into consideration, one gets to see a rising pattern along with the daily time-period. Depending on the present price action, the commodity market can expect to show a bearish movement. If the rally or the pricing of the gold is on the downward side, it would be testing the 51300-51000 levels.

The present support level holding for gold is going to be around 51600. The market expert points an important commodity gold tips about this metal, which is an alternate scenario that might evolve if the market can bang down the support level, it would set a new trend which could be bullish or sideways. Hence, investors should look out for options like buying futures on MCX. Investors should always go for options that sound favorable during a certain time.

Silver

Silver has made a candlestick formation. Silver wasn’t performing very well like gold in the commodity market. But professional market advisory like MCX Advisory knew it very well that silver would also turn back. Now, this metal is seeing a rally with the price of this metal going up. Hence, investors who invested in silver would soon earn a profit. 

In fact, MCX Silver September's future contract recorded Rs 76360/kg on 9th August, the highest for any first-month contract. The reasons are a strong interest of the investor and recovery of the industrial sector. One crucial commodity silver tips for new investors is that this base metal is witnessing a rally on the supply-end, as some countries which supply base metals are facing a huge number of COVID cases and China pushing up their demand for this metal. Hence, it’s expected that the price would remain on the higher end.

Well, just like other industrial metals, silver is going to rally in the commodity market as the world is reopening its industrial activity. With import/export rules being relaxed and its demand won’t likely drop. Industries would need it for various component build-up. Based on this scenario, it’s unlikely that the price would fall; instead, it would stay firm.

Well, silver might outperform gold on a short-term basis. Hence, based on commodity silver tips investors should start to trade in silver as it’s the right time. However, investors should keep in mind the volatility factor of silver.

Zinc

On taking a close look into Zinc’s August future chart, it showed a rising pattern. During the last few sessions, the price action showed oscillation around the horizontal range. It tested the trading channel’s resistance level. According to market experts, the market is going to see a bullish trend with the present price action, where key resistance holding is expected to be around Rs 191.50. If the market is successful in breaking the resistance level, the trend must be revised.

Crude Oil

Looking forward to trade in crude oil? If yes, investors need to follow some basic crude oil trading tips. According to the findings by the market experts, crude oil would be trading sideways with a slightly bullish trend. Crude oil might get support near Rs 2980 and resistance near Rs 3260. The price of crude oil was hovering around $42 levels last week. In August, additional demand for 1.5mbpd might be seen. However, the price of crude oil might increase, due to increased liquidity.

Natural gas went through a price correction. Post correction the resistance was seen around Rs 172 while it took the support of around Rs 164. In today’s (12th August) market, natural gas showed an ascending “broadening wedge” design. Well, over the last few sessions, the market ended on sideways after testing the resistance level. But there is a high chance that the market could break the support level. Hence, investors shouldn’t jump and trade with this commodity. Rather, they should take the help of expert advisors like the MCX Advisory team before making any move.

Agricultural Commodities

Investors looking forward to MCX tips for agricultural commodities should keep in mind that rain is playing hide and seek. It’s a well-known fact that the price of agriculture commodities depends on the monsoon. Hence, a bullish trend is likely to be expected for the agriculture counter.

In the North Western part of India, 22% of rain deficiency was reported. This impacted the growth of Kharif crops. Well, the rain deficiency caused in North West India was balanced by 18% excessive rain in East India and South India, which is also harmful to the crops. In short, crop productivity got greatly impacted by these factors.

With monsoon remaining absent from most of India and demands for seeds and crops are on the rise, it’s expected that the price of commodities will be on the upward movement. For instance, based on NCDEX Chana Tips, investors should wait till the end as the futures contracts would be extending till September.

Important commodity tips about agricultural commodities from the market experts are that the prices of the agriculture commodities might see a correction if the monsoon scenario improves in India, especially across North West India. When the market improves, investment choice on agri-commodities would become easy.

Well, an investor can invest in any type of commodities. It’s their personal choice.

Bottom Line

Are you worried about the present market scenario? Are you worried about the volatile commodity market? If yes, you don’t need to worry anymore. With professional advisories by your side, you can trade commodities with complete peace of mind. In case of any assistance, a financial advisory team like Shyam Advisory is just a call away. The teams will ensure that their clients understand the financial and also the technical aspects of the commodity market very well. This is done so that the clients don’t lose much money even by a small margin. So what are you waiting for? Give us a call now and gain a huge profit.