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Bullion Outlook

• Gold prices slipped yesterday amid a strong dollar and surge in US treasury yields. Additionally, investors weighed worsening Covid situation in top metal consumer China. However, further downside was cushioned on risk aversion in global markets

• Additionally, pending home sales fell far more than expected in November largely due to Fed’s interest rate hikes to combat soaring inflation

• Gold prices are likely to trade with a negative bias mainly on the back of a firm dollar and rise in US treasury yields. Further, investors turned cautious following a worsening Covid situation in top bullion consumer China. Moreover, investor’s focus will now shift to jobless claims data, which is likely to show that more people filed for unemployment claims. MCX Gold is expected to correct towards 54400, followed by 54100 levels

Base Metal Outlook

• Base metals ended on a weaker note on a firm dollar and risk aversion in global markets. Further, prices corrected on fears over a recession and expectations of weaker demand. Moreover, weaker than expected US pending home sales numbers, which marked a decline of 4% against market expectation of -0.8%, added downside pressure

• Copper prices are expected to trade with a negative bias for the day amid worsening Covid situation in the top metal consumer China. Additionally, re-bounce in the dollar index and pessimistic global markets sentiments may add downward pressure. However, lower inventory in LME and SHFE could restrict any sharp downside move in the red metal

• MCX Copper has been moving above the 20 day EMA at 707 and 200 day EMA at 706, which could act as key support for price. As long as it holds this level price is expected to rise towards the 738 mark, followed by 742

Energy Outlook

• Natural gas prices declined the most amid prospects of lower heating demand on forecasts of much warmer-than-normal temperatures this week and prolonging into early January

• Crude oil futures reversed their gains on Wednesday on fears that surging Covid-19 cases in China would hinder the demand outlook. Additionally, expectations of further monetary tightening and a possible recession next year added downward pressure

• Crude oil prices may trade with a negative bias today as rising Covid-19 cases in China darkened hopes of a recovery in fuel demand. Additionally, a strong dollar and weakness in global equities will hurt prices. Meanwhile, investors are expected to remain cautious ahead of EIA inventory data, which is expected to decline by 1.57 million barrel. A larger than expected drawdown could support oil prices. In MCX, 6400 (20 DEMA), holds key to the trend. A move below 6400 would weaken the price towards the next key support at 6200

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