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Daily Commodities Outlook

Bullion Outlook

• Gold prices dropped on Monday as investors stayed on the sidelines ahead of US inflation data and a series of central bank meetings across the world, including the Federal Reserve

• Further, bullion prices were pressurised by strong US dollar and US treasury yields

• Gold prices are expected to trade with a negative bias for the day amid rise in risk appetite in the global markets. However, sharp downside may be capped as investors are anticipating softer inflation and smaller interest rate hikes from the Federal Reserve. MCX gold prices are likely to break the key support level of 54,000 to continue their downward trend towards the level of 53,850 in the coming trading session

• Additionally, MCX silver prices are expected to take cues from gold prices and trade towards 67,000 level

Base Metal Outlook

• Copper prices slipped from near six-month highs, as the US dollar firmed ahead of rate decisions by central banks later this week, with fears of a global recession and bleak metals demand weighing on prices further

• Further, prices were pressurised by persistent worries about the economy in top metals consumer China as it grapples with fresh Covid-19 cases

• However, further downside was prevented on rise in copper inventories at LME registered warehouses

• Copper prices are expected to trade with a negative bias for the day amid concerns over economic growth in China due to rising Covid-19 cases and uncertainty over US interest rate hikes. Meanwhile, worries over supply disruption from South America and diminishing copper inventories may prevent sharp fall in prices. MCX copper is likely to break key support level of 698 and drop further till 693 level

Energy Outlook

• Natural gas prices surged nearly 10% on Monday amid forecasts of much colder weather as well as higher heating demand through late December than previously expected

• Crude oil prices rose on supply concerns as a key pipeline supplying to the US closed and Russia threated to cut production in retaliation for a western price cap on its exports. Further, traders are worried about how long it would take to clean up and restart the Keystone oil pipeline after more than 14000 barrels of oil leaked

• The outage is expected to shrink supplies at the Cushing, Oklahoma storage hub, and delivery point for benchmark US crude oil futures

• Oil prices are likely to trade with a positive bias for the day amid rise in risk appetite in global markets and ongoing supply concerns. A key pipeline supplying oil to the US still remains shut. Further, expectations are that easing Covid-19 restrictions in China may boost fuel demand. MCX crude oil prices are likely to continue their upward trend towards the level of 6250

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