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Gold

Gold yesterday settled up by 0.36% at 51626 supported by a softer dollar and bets that the Federal Reserve may cool the pace of rate hikes as economic risks deepen. U.S. labor costs increased strongly in the second quarter as a tight jobs market continued to boost wage growth, which could keep inflation elevated and give the Federal Reserve cover to continue its aggressive interest rate hikes. Other data showed consumer spending accelerating in June, though the uptick was tied to higher costs for gasoline as well as a range of other goods and services, with monthly prices surging by the most since 2005. Soaring inflation contributed to the economy's contraction in the first half of this year, leaving it on the brink of a recession. Physical gold buying eased in India as rupee prices rose to a three-week high, while the likelihood of fresh restrictions to tackle higher coronavirus cases clouded the demand outlook in top-consumer China. Dealers were offering a discount of up to $6 an ounce below official domestic prices, having offered discounts of as much as $10 last week. China's demand for gold jewellery, bars and coins is expected to fall year-on-year in the second half of 2022, a World Gold Council (WGC) official said, as measures taken to contain coronavirus outbreaks cause uncertainties and cut consumer spending. Technically market is under fresh buying as market has witnessed gain in open interest by 4.75% to settled at 15635 while prices up 183 rupees, now Gold is getting support at 51394 and below same could see a test of 51161 levels, and resistance is now likely to be seen at 51777, a move above could see prices testing 51927.
 

Trading Ideas:
* Gold trading range for the day is 51161-51927.
* Gold steadied supported by a softer dollar and bets that the Federal Reserve may cool the pace of rate hikes as economic risks deepen.
* The U.S. economy contracted in the second quarter
* Higher domestic prices slow buying in major consumer India


Silver

Silver yesterday settled up by 1.3% at 58370 after the Federal Reserve extended its tightening path with a 75bps interest rate hike in its July meeting. The move furthered the tightening momentum by major central banks, as inflation in the world’s largest economies have shown no sign of peaking. The ECB raised policy rates by a larger than expected 50bps increase and the BoE is likely to follow the same path next week. Still, prices remain close to the two-year low of $18.1 touched earlier in the month as concerns of economic slowdown drove investors to the US dollar. U.S. labor costs increased strongly in the second quarter as a tight jobs market continued to boost wage growth, which could keep inflation elevated and give the Federal Reserve cover to continue its aggressive interest rate hikes. The Fed's "Beige Book" report showed that "most districts continued to report wage growth," and "a quarter of districts indicated wage growth will remain elevated for the next six months." There were 11.3 million job openings at the end of May, with nearly two open positions for every unemployed person. Employment costs were boosted by strong wage gains. Wages and salaries shot up 1.4% in the second quarter after rising 1.2% in the first quarter. Technically market is under short covering as market has witnessed drop in open interest by -5.77% to settled at 15461 while prices up 751 rupees, now Silver is getting support at 57705 and below same could see a test of 57039 levels, and resistance is now likely to be seen at 58736, a move above could see prices testing 59101.
 

Trading Ideas:
* Silver trading range for the day is 57039-59101.
* Silver gained after the Federal Reserve extended its tightening path with a 75bps interest rate hike in its July meeting.
* U.S. labor costs rise strongly in second quarter
* Consumer spending accelerates 1.1% in June


Crude oil

Crude oil yesterday settled up by 1.63% at 7842 as attention turned to next week's OPEC+ meeting and expectations that it will dash U.S. hopes for a supply boost. Compliance by the Organization of the Petroleum Exporting Countries and its allies with oil output cut pledges reached 320% in June, Russian Interfax news agency cited a source familiar with the data. It also said that the OPEC+ group's combined oil underproduction was 2.84 million barrels per day last month. OPEC and its allies will consider keeping oil output unchanged for September when they meet next week, despite calls from the United States for more supply, although a modest output increase is also likely to be discussed, eight sources said. The Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, collectively known as OPEC+, will by August have fully unwound record output cuts in place since the COVID-19 pandemic took hold in 2020. U.S. crude oil stockpiles fell last week, driven by a surge in exports to an all-time high due to the big discount for U.S. crude when compared with international benchmark Brent. U.S. crude oil output rose last week by the most since December 2021, Energy Information Administration data showed. Crude output rose by 200,000 barrels per day to 12.1 million bpd, the EIA said. Technically market is under fresh buying as market has witnessed gain in open interest by 23.32% to settled at 3749 while prices up 126 rupees, now Crude oil is getting support at 7646 and below same could see a test of 7449 levels, and resistance is now likely to be seen at 8064, a move above could see prices testing 8285.
 

Trading Ideas:
* Crude oil trading range for the day is 7449-8285.
* Crude oil prices rose as attention turned to next week's OPEC+ meeting and expectations that it will dash U.S. hopes for a supply boost.
* OPEC+ compliance with oil output pledges was at 320% in June
* OPEC+ to weigh holding oil output steady or small hike

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