BULLION - MCX Gold and Silver may witness mixed trade in line with international market however bias may be on the downside. Spot gold trades in a narrow range near $1330/oz after a minor gain yesterday. Gold is consolidating after recent correction as market players moved to sidelines awaiting more clarity on US-China trade, Brexit and Fed�s monetary policy. Tensions relating to US-China trade dispute has eased as US extended the deadline to impose higher tariffs and also showed inclination to meet Chinese President to finalize deal however there is still skepticism as there has been no concrete announcement on development in recent meetings while no timeline has been announced for meeting or extension of deadline. On Brexit front, UK Prime Minister has promised a vote to delay Brexit if her proposed deal fails. A delay will ease immediate concern but also threatens backlash from pro-Brexit supporters. Rangebound price movement in gold has also pushed investors on sidelines. Gold holdings with SPDR ETF were unchanged at 788.331 tonnes yesterday. Gold however remains supported by weaker US dollar. The US dollar index trades near 96.1 levels after a 0.4% decline yesterday. The US dollar came under pressure as Fed Chairman Jerome Powell reemphasized on need for patient rate hike stance while maintaining optimism about US economy. British Pound has surged against the US dollar on hopes of Brexit delay. Gold may remain rangebound as major issues like US-China trade dispute and Brexit are unlikely to be resolved in the near term. The bias in the near term may however be on downside as prospect of US-China trade deal and Brexit delay will keep risk sentiment upbeat.
ENERGY- Crude Oil- MCX Crude may note some gains tracking cues from international exchange. Brent crude trades higher near $65 per barrel after a 1.2% gain yesterday. NYMEX crude was last reported to trade near $56/bbl. Crude fell sharply earlier this week as US President expressed concerns about higher oil price and called on OPEC to stabilize prices. Oil has stabilized since then as OPEC is unlikely to bide under US pressure this time as prices are not that high and OPEC want to avert any sharp drop in price. Crude also gained support from API weekly report which noted an unexpected 4.2 million barrels decline in US crude oil stocks and a bigger than expected decline in gasoline stocks. API however noted a sharp rise in crude stocks at Cushing terminal and also an unexpected increase in distillate stocks. However, weighing on price are easing supply concerns as Saudi Arabia restarted operation at Safaniyah oilfield while Libyan officials have started efforts to lift the force majeure at Libya's largest oil field, Sharara. Amid other factors, support from weaker US dollar is countered by choppiness in equity markets as market players await more clarity on US-China trade talks and Brexit. Crude may trade sideways to positive ahead of EIA weekly inventory report today. EIA is expected to note a 2.9 million barrels increase in US crude oil stocks. Apart from stocks, focus will be on US crude production and refinery demand. Crude will also be affected by US economic data and development relating to US-China trade talks and Brexit.
Natural Gas- MCX Natural gas may note some decline tracking cues from international exchange. NYMEX natural gas has slipped more than 1% to trade near $2.76/mmBtu after a minor fall yesterday. Natural gas rallied in last few days amid late season cold weather in US and expectations of another bigger than average decline in US natural gas stocks. However, the rally came to a stall as market players focused on nearing end of higher demand season which will keep a check on heating demand. Also weighing on price is higher US gas production which is expected to rise further in coming months. Natural gas may witness choppy trade as market players assess current against future demand however bias may be on the downside.
BASE METAL - Base metals on LME trade choppy today after most metals ended with modest gains yesterday. LME Zinc was the best performer with 0.8% gains followed by nearly 0.3% rise in Aluminium prices and 0.2% gains in Copper and Lead prices. In other metals however Nickel ended with 0.1% decline.
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