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Bullion Outlook

• Comex gold prices traded mixed on Friday amid a stronger dollar index and decline in US treasury yields. Further, worries over the Omicron surge and rising inflation boosted demand for safe haven assets

• US benchmark 10 year treasury yields declined to 1.40, reducing the opportunity cost of holding non yielding bullion

• MCX gold prices are likely to trade in a range of | 48,500 to 48,900 levels with a positive bias on the back of concerns over new corona virus variant and decline in treasury yields. Further, risk aversion in the global markets and weakness in the rupee against dollar may also support gold prices

• Silver prices are expected to take cues from gold prices and rise further towards 63,000 levels for the day

Base Metal Outlook

• Aluminium prices surged 2.57% on Friday after China's output of raw material alumina slumped last month, highlighting the risk of tight supply due to power shortages

• China's output of alumina fell in November by 4.5% YoY to its lowest in 18 months, which is smelted to make aluminium. China aims to lower its carbon output by restricting the electricity consumption and production of power-intensive industries such as alumina refining and aluminium smelting

• Further, LME registered warehouse inventories of aluminium declined to 9,79,600 tonnes, lowest since 2016

• MCX aluminium prices are likely to trade in a range of | 218 to 224 levels with positive bias due to supply disruptions and decline in inventories. However, sharp upside may be prevented on stronger dollar

Energy Outlook

• Crude oil prices declined 2.87% on Friday as surging cases of the Omicron Coronavirus variant raised fears that new restrictions may hit fuel demand

• In the US, the rapid spread of the Omicron variant has led some companies to pause plans. In Denmark, South Africa and Britain, the number of new Omicron cases has been doubling every two days. Further, Danish Prime Minister Mette Frederiksen said on Friday that her government would propose new restrictions

• Meanwhile, US oil rigs count increased last week to 475 from 471, highest since April 2020, while gas rigs count fell one to 104

• MCX crude oil prices are likely to trade in a range of | 5,250 to 5,450 levels with a negative bias due to higher crude oil supply and demand concerns over the Omicron Coronavirus variant

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