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  1. Commodity trade setup for Dec 4: Gold consolidates around ₹76,000, Crude sustains positive momentum in a range

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Commodity trade setup for Dec 4: Gold consolidates around ₹76,000, Crude sustains positive momentum in a range

Upstox

4 min read | Updated on December 04, 2024, 17:55 IST

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SUMMARY

Crude oil 18 December futures on MCX showcased a bullish engulfing pattern on the daily chart on 3 December. Short-term traders should monitor the high of this bullish reversal pattern closely. A decisive close above the high would confirm the pattern, signalling further upside, while a rejection at higher levels could invalidate the setup.

Crude oil prices are trading firmly as market participants expects OPEC and its allies to extend oil output cuts to Q12025.

Crude oil prices are trading firmly as market participants expects OPEC and its allies to extend oil output cuts to Q12025.

Market recap (as of 5:45 pm)

  • Gold 5 Dec Futures: ₹76,857/ 10 gram (▼ 0.06%)
  • Silver 5 Dec Futures: ₹91,862/ 1 kg (▼ 0.36%)
  • Crude Oil 18 Dec Futures: ₹5,930/ 100 BBL (▲ 0.02%)
Gold: The yellow metal is trading flat, with spot gold trading 0.03% lower at $2,667 per ounce. Gold prices rose marginally in the early morning trades as political turmoil in South Korea and increased tensions between Israel and Lebanon spurred some safe haven demand. However, gains were limited amid the rise in the US dollar.
Silver: Silver prices are trading lower, down 0.44% at $31.35 per ounce in the spot market. Precious metals are trading in the range as traders/investors turn cautious ahead of Federal Reserve Chair Jerome Powell speech on December 5.
Crude Oil: Crude oil prices are trading firmly on Wednesday as market participants are expecting the Organization of the Petroleum Exporting Countries (OPEC) and its allies to extend output cuts until the end of the first quarter of 2025 when its members meet on Thursday. Brent Oil Futures trading near $73.90, while WTI crude at $70.15 as crude oil futures gained over 0.5% each.

However, despite positive triggers, crude oil prices haven't been able to surpass $75 per barrel levels amid geopolitical tension across different parts of the world. Weekly crude oil inventories numbers will be announced later in the day.

Technical structure

Gold: The price of the yellow metal extended the range-bound movement for the seventh consecutive day, trading within the range of 25 November candle. Currently, the broader structure of the gold remains positive with immediate support around the 50 day exponential moving average and the crucial support of 73,900 zone, the crucial swing low. Unless the yellow metal reclaims the resistance zone of 79,200 on a closing basis, the trend may remains sideways.
dec041.webp
Silver: After rebounding over 3% from the crucial support zone of 82,200, the silver faced resistance around its 21 and 50 day EMAs and is trading in the red. From the past three weeks, silver is broadly consolidating within the range of 94,000 and 89,000. Unless the silver breaks this range on a closing basis, the trend may remain range-bound with crucial support around 89,000 to 89,200 zone.
dec042.webp
Crude Oil: Oil prices extended the gains for the second consecutive day and are currently trading above the high of the bullish engulfing candle formed on 3 December. The bullish engulfing is a bullish reversal pattern characterized by a large bullish candle fully engulfing the prior smaller bearish candle. It typically occurs in a downtrend and indicates strong buying pressure, suggesting a potential trend reversal.

However, the pattern gets confirmed if the close of the subsequent candle is above the high of the reversal candle. Meanwhile, it is important to note that the broader structure of the crude oil remains range-bound between 6,100 and 5,600 since 15 October. A break of this range on a closing basis will provide further directional clues to the traders.

dec043.webp

The open interest data for the 16 December expiry of crude oil saw significant additions of put options at 5,800 and 5,900 strikes. Conversely, the call options base remained at 6,000 strike, suggesting that crude may face resistance around this zone.

dec044.webp

Disclaimer:

Derivatives trading must be done only by traders who fully understand the risks associated with them and strictly apply risk mechanisms like stop-losses. The information is only for the client's consumption, and such material should not be redistributed. We do not recommend any particular stock, securities, or strategies for trading. The securities quoted are exemplary and are not recommendatory. The stock names mentioned in this article are purely to show how to do analysis. Take your own decision before investing.

About The Author

Upstox
Upstox News Desk is a team of journalists who passionately cover stock markets, economy, commodities, latest business trends, and personal finance.

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