Published on 18/05/2017 12:19:15 PM | Source: Sushil Finance

We expect gold prices to trade positive - Sushil Finance

Posted in Commodities Reports | #Commodity Tips #Sushil Finance


Gold

Gold rose to a two-week high on Wednesday as political turmoil in the United States reduced expectations of aggressive interest rate rises this year, pushed down U.S. bond yields and drove the dollar to its lowest in six months.

Lower yields reduce the opportunity cost of holding non-yielding gold, while a weaker dollar makes bullion cheaper for non-U.S. investors. Higher interest rates would push yields up and likely boost the dollar.

Futures traders are pricing in a 66 percent chance of a June rate rise, down from around 90 percent earlier this month, according to CME's FedWatch Tool.

 

Outlook

We expect gold prices to trade positive on the back of short covering after drop in prices.

 

Silver

Silver as up 0.6 percent at $16.92 an ounce.

 

Outlook

We expect silver prices to trade positive on the back of short covering after drop in prices.

 

Crude Oil

Oil prices settled at a two-week high on Wednesday after U.S crude inventories declined for the sixth straight week, a positive sign for markets ahead of next week's OPEC meeting, where major oil producers are expected to extend supply cuts.

The Organization of Oil Exporting Countries (OPEC) and other key producers will gather in Vienna on May 25 to decide whether to extend output cuts of 1.8 million bpd that started in the first half of 2017. Riyadh and Moscow say they should be extended until March 2018.

The EIA forecasts U.S. production to average nearly 10 million bpd by the end of 2018.

Libya also plans to restart production. In an interview with Reuters, the national oil company chairman said the company has returned to parts of the Sirte basin for the first time in more than two years.

 

Outlook

We expect crude oil prices to trade negative on the back of profit booking after sharp up-move in prices.

 

Natural Gas

 

Outlook

We expect Natural gas prices to trade sideways on the back of short covering after drop in prices.

 

Base Metals

Nickel and zinc rebounded on Wednesday after steel prices jumped, while nickel also received a boost from news that output at a Canadian mine would be suspended.

Meanwhile, copper was knocked lower by a fresh influx of inventories into warehouses.

 

Outlook

We expect base metal prices likely to trade volatile on the back of mixed fundamentals.

 

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