BULLION - MCX Gold and Silver may note mixed trade in line with international market however overall bias is still on the upside. COMEX gold trades in a narrow range above $1315/oz after flat close yesterday. Gold has turned rangebound amid lack of fresh cues. Stability in US dollar, firmness in US equity markets and ETF outflows is weighing on gold price. However, Fed�s dovish stance and global uncertainty has kept a floor to price. The US dollar index trades little changed near 96 levels after 0.2% gain yesterday. The US dollar has edged up amid concerns about European economies amid disappointing economic data and Brexit uncertainty. However, weighing on US dollar is mixed economic data and Fed�s patient stance on rate hikes. Dallas Fed President Robert Kaplan said he�s waiting on clarity about the US economic outlook before supporting further moves on interest rates. US equity markets are holding firm amid some upbeat corporate earnings challenges. However, global economic outlook is mired by uncertainty about Brexit, US-China trade deal and possibility of another US government shutdown. Gold holdings with SPDR ETF fell by 1.47 tonnes to 811.817 tonnes, indicating some profit taking. Gold is showing some signs of correction after failing to test $1330/oz levels. We expect choppy trade amid lack of fresh cues however overall bias is still positive as Fed�s stance will weigh on US dollar while global economic uncertainty will dampen risk sentiment
ENERGY- Crude Oil- MCX Crude may note mixed trade in line with international market but buy on dips is recommended. NYMEX crude trades in a narrow range above $53 per barrel after a 1.6% decline yesterday. Crude has fallen for last two days amid some profit taking after recent rally to the highest level since November 2018. Weighing on crude price is API weekly report which noted a bigger than expected 2.51 million barrels increase in US crude oil stocks and another increase in gasoline and distillate stocks. Also weighing on price is disappointing economic data from US and Europe which has rekindled demand concerns. Gains in US dollar have also put some pressure on crude oil price. However, supporting price is OPEC�s adherence to production cuts, decline in US crude oil rig count, supply concerns relating to Venezuela and continuing firmness in US equity market. Crude has rallied sharply in last few days and we are seeing some profit taking amid lack of fresh positive triggers. We are however maintaining buy on dips view amid general upbeat risk sentiment and OPEC�s commitment to production cuts. Focus today will be on US EIA weekly report which is expected to note a 1.4 million barrels increase in US crude oil stocks. Apart from stocks, focus will be on US crude production and refinery demand. Also in focus will be US economic data and development relating to US-China trade issue.
Natural Gas- MCX Natural gas may note some gains tracking cues from international exchange but upside is limited. NYMEX natural gas has gained more than 1% to trade near $2.7/mmBtu after a near flat close yesterday. Natural gas has edged up amid some dip buying after the sharp fall in last few days when it tested the lowest level since April 2018. Supporting gas price is expectations of a sharp drop in US gas stocks owing to recent cold snap in US. As per early estimates, EIA weekly report may note a 227 Bcf decline in gas stocks, biggest fall since Jan.2018. However, weighing on price is expectations of subdued demand going ahead as weather forecasts show mixed weather in coming days. Natural gas has fallen sharply in last few days and a rebound was anticipated however demand outlook is still weak and gains may not sustain.
BASE METAL - Base metals on LME trade sideways to higher today after noting mixed movement yesterday. LME Copper was the best performer with 1.05% gains followed by modest 0.2% rise in Aluminium prices. In other metals, however, Zinc, Nickel and Lead ended 2.1%, 1.7% and 1.2% lower respectively.
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