BULLION - MCX Gold and Silver may note some decline tracking cues from international exchange however downside is limited. COMEX gold trades weaker near $1310/oz after a 0.4% decline yesterday. Gold is under pressure amid some profit taking after recent rally to April 2018 highs. Gains in US dollar and ETF outflows have put pressure on gold price. Demand in Indian markets is also expected to weaken amid higher price while Chinese buying may slowdown post Lunar New year holidays. Reports of Venezuela�s gold sales have also fuelled concerns about distress sales amid economic uncertainty. The US dollar index trades little changed near 96.4 levels after a 0.3% gain yesterday. The US dollar is supported by concerns about health of European economies amid disappointing economic data and Brexit uncertainty. Australian dollar has also weakened against US dollar amid central bank�s dovish stance. While Fed has become patient on rate hikes, it is still upbeat on the economy. Federal Reserve Chairman Jerome Powel was quoted stating that the US economy is now in a good place. Gold holdings with SPDR ETF fell by 2.1 tonnes to 809.76 tonnes amid some profit taking after recent rally. However, supporting gold is global uncertainty. Asian equity markets trade largely lower today after a flat close in US markets yesterday. Market players continue to remain wary about US-China trade talks, Brexit uncertainty and possibility of another government shutdown and mixed economic data from major economies.
ENERGY- Crude Oil- MCX Crude may note mixed trade in line with international market but overall bias is on the upside. NYMEX crude trades in a narrow range near $54 per barrel after a 0.7% gain yesterday. US EIA weekly report was mixed to positive. EIA noted a 1.263 million barrels increase in US crude oil stocks as against expectations of 1.4 mn bbl rise. EIA also noted a smaller than expected rise in gasoline stocks and a bigger than expected decline in distillate stocks. US crude production was however steady at record high level of 11.9 million barrels per day. Also supporting price is OPEC�s adherence to production cuts and supply concerns relating to Venezuela. According to Azerbaijan's energy minister, OPEC and its allies will probably extend their oil-cuts agreement later this year to keep prices at "comfortable" levels. US sanctions on Venezuela are expected to reduce exports by at least 500,000 bpd. However, weighing on crude price is gains in US dollar, choppiness in equity market and demand concerns amid mixed US and Chinese economic data and uncertainty about US-China trade, Brexit and another government shutdown. The US dollar has strengthened amid concerns about European economies amid disappointing economic data and Brexit. Crude has rallied sharply in last few weeks but is now struggling to gain traction amid lack of fresh cues. We expect choppy trade to continue amid lack of fresh cues but buying could emerge at lower levels on back of OPEC�s production cuts.
Natural Gas- MCX Natural gas may note mixed trade in line with international market but overall bias remains weak. NYMEX natural gas trades marginally higher near $2.68/mmBtu after a flat close yesterday. Natural gas has seen some recovery from April 2018 lows amid position squaring ahead of inventory report. EIA is expected to note a 231 Bcf decline in gas stocks as against 5-year average decline of 150 Bcf. A bigger than average decline is positive for price as it will widen the deficit however it has been factored in given the recent cold snap in US. Weighing on price is mixed weather forecast which will keep a check on heating demand.
BASE METAL - Most metals on LME trade sideways to lower today after noting closing on a lower note yesterday. LME Zinc was the worst performer with 1.35% slide followed by 0.9% decline in Nickel prices and 0.8% slide in Aluminium prices. In other metals, Lead ended 0.6% lower however Copper continued its uptrend to end 0.7% higher.
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