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Last week, spot gold prices rose by 1.6 percent as rising chances of a potential recession amid escalating trade tension between U.S. & China boosted the appeal for the bullion metal. Prices were further supported after the yields on U.S. 30 year bond declined by 27 basis points in this week. Falling yields weighed on the Dollar and pushed the Gold prices higher.
The prolonged tension between U.S. and China seems to be never ending. However, situations got better after the United States said it would delay tariffs on some of the Chinese products. The super power nations might resume with their trade negotiations but investors might have a cautious approach as an actual deal might take time.
Markets will have a keen watch on the Federal Reserve's annual symposium next week to have a look on their stance ahead.
Last week, Spot silver prices rose by 1.47 percent to close at $17.2 per ounce while MCX silver prices rose by 1.15 percent to close at Rs.43824 per kg.
We expect gold and silver prices to trade lower as expectation of stimulus by major central banks led to appreciation of the U.S. Dollar and shifted the investors towards riskier asset.
On the MCX, gold prices are expected to trade lower today; international markets are trading lower by 0.29 percent to close at 1519.25 per ounce.
Last week, WTI Crude prices dipped over 4 percent over Last week, WTI Crude rose over 1 percent. Optimism over a possible trade deal between U.S and China buoyed the prices as the United States said it would delay imposing a 10% tariff on certain Chinese products, easing concerns over a global trade war that has pummelled the market in recent months. Both the countries will resume with the trade negotiations but an actual trade deal might take time.
However, the gains were capped as worries over global slowdown amid surge in U.S. Crude inventory levels weighed on the prices. Crude inventories climbed 3.7 million barrels to 443 million, compared with analysts' expectations for a decrease of 2.8 million barrels which pushed the prices lower.
Moreover, China, one of the biggest oil consumers witnesses a significant drop in industrial output growth falling over its 17-year low.
Crude prices might trade higher following an attack on Saudi's Oil facilities during the weekend, however, the gains were capped after OPEC trimmed down its demand growth forecast for this year.
We expect oil prices to trade higher today, international markets are trading higher by 0.99 percent at $55.35 per barrel.
Last week, base metals on the LME traded positive except for Lead which dipped by 0.5 percent. Nickel was the highest gainer amongst the pack as Indonesia the second largest Nickel exporter aims to hasten the application of the ban on mineral ore exports which was supposed to come in to effect in 2020. Rising chances of a possible global shortage pushed Nickel prices higher. The aim of the ban was to make the miners in Indonesia the major exporter of nickel.
Aluminium prices might find some support as fresh supply disruptions arising from China after a typhoon affected the facilities belonging to China Hongqiao Group, world's top Aluminium producer.
However, the gains for industrial metals were capped as China; one of the biggest metal consumers witnessed a significant drop in industrial output growth falling over its 17-year low. Weakening of Chinese economy amid escalating tension between U.S. & China might raise severe demand concerns for Industrial metals. Situations between U.S. & China have taken a positive turn after the United States said it would delay imposing a 10% tariff on certain Chinese products, easing concerns over a global trade war.
Last week, LME Copper prices ended marginally higher by 0.1 percent. Rising chances of a possible trade deal between U.S. and China supported the prices.
Expectation of stimulus measures by major metal consumer China might support the industrial metal prices.
On the MCX, Copper prices are expected to trade higher today; international markets trading higher by 0.16 percent at $5763 per tonne.
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