Crude oil prices are likely to trade in a range of | 5,200 to 5,400 levels - ICICI Direct
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Bullion Outlook
Comex gold prices declined 0.84% on Tuesday due to a stronger dollar index and higher-than-expected producer price index data from the US
The annual rate of US producer price index accelerated to 9.6% in November from 8.8% in October, which has reinforced fears that the Federal Reserve will speed up the tightening of monetary policy in the meeting on December 16
US benchmark 10 year treasury yields rose to 1.43, increasing the opportunity cost of holding non yielding bullion
MCX Gold prices are likely to trade in a range of | 47,900 to 48,400 levels with a mixed bias on the back of elevated US treasury yields. However, a sharp downside may be prevented on risk aversion in the global markets. Further, investors will anxiously await the outcome of the US Fed meeting on December 16
Base Metal Outlook
Copper prices slipped 0.42% on Tuesday amid rising stockpiles and demand concerns over the impact of the Omicron variant. Further, prices were pressurised on expectations of an earlier interest rate hike by the US Fed
Moreover, Chinese manufacturing province Zhejiang is fighting its first Covid-19 cluster this year, with more than a dozen Chinese companies suspending production due to tightened Covid-19 curbs
At the same time, LME registered warehouse inventories of copper rose to 87,375 tonnes, highest in the last three weeks
MCX copper prices are likely to trade in a range of | 718 to 736 levels with a negative bias due to demand concerns over the new Coronavirus variant and rising LME inventories. Further, worries about monetary policy tightening in the US may also hamper demand for industrial metals
Energy Outlook
Crude oil prices declined 1.75% on Tuesday after the International Energy Agency (IEA) reported that the new Omicron Coronavirus variant was set to dent the global demand recovery
The IEA lowered its forecast for oil demand this year and the next year by 100,000 barrels per day, mostly due to new travel curbs
Governments around the world, including most recently Britain and Norway, have tightened restrictions to stop the spread of the virus
According to US EIA monthly forecast, output in the largest US shale basin is expected to surge to a record in January
MCX crude oil prices are likely to trade in a range of | 5,200 to 5,400 levels with a negative bias due to demand concerns over Omicron variant and expectations of higher oil production from US. Further, investors will keep an eye on crude oil inventories data from the US
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