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Daily Commodities Outlook

Bullion Outlook

• Gold prices dropped on Monday amid a surge in US 10 year’s treasury yields. Further, expectations of more rate hikes from the US Federal Reserve dented the non-yielding bullion’s appeal

• However, sharp downside was prevented on a weakness in the US dollar and ongoing concerns over a global economic slowdown

• Gold prices are expected to trade with a negative bias for the day amid a rise in US treasury yields. Meanwhile, sharp downside in prices may be cushioned on weakness in the dollar and pessimistic global market sentiments. Market sentiments were hurt on recessionary fears and on concerns over surge in Covid-19 cases in China. MCX gold prices are likely to break the key support level of 54,150 to trade in a downward trend towards the level of 53,900 in the coming trading session

• MCX silver prices are expected to take cues from gold prices and continue their downward trend towards 66,500 levels

Base Metal Outlook

• Copper prices rose on Monday, supported by a weaker dollar and hopes for stronger demand in China on the back of promised economic stimulus from the government

• The Chinese government said it would step up measures to stabilise its economy. The central bank is expected to ease monetary policy

• Further, a decline in copper inventories at LME registered warehouses, supported copper prices

• Copper prices are expected to trade with a positive bias for the day amid weakness in the dollar and as top metal consumer China pledges to stabilise its Covid-ravaged economy. Further, copper may rally as tight global stockpiles fuelled supply concerns. MCX Copper is holding strong support near 700 levels. As long as it sustains above this level it may rally till 710 levels

Energy Outlook

• MCX Natural gas prices tumbled almost 10.50% on Monday as the energy minister of the European Union agreed to a cap on natural gas prices after months of negotiations as pressure continued to mount with Russia's continuing war on Ukraine

• WTI Crude Oil prices rose as optimism around China relaxing its Covid19 restrictions outweighed fears of a global recession that would weigh on energy demand

• Further, oil was supported by the US Energy Department saying on Friday that it will begin repurchasing crude for the Strategic Petroleum Reserve

• Oil prices are likely to trade with a positive bias for the day amid weak dollar and as the US plans to restock its strategic petroleum reserves. Further, China pledged to stabilise its Covid-ravaged economy. MCX crude oil prices are expected to surpass the hurdle of 6350 to continue its upward trend towards the level of 6420

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