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Bullion Outlook

Gold prices continued to rally as the turmoil in Ukraine intensified. Further, prices surged on risk aversion in global markets. Market sentiments were hurt on concerns that elevated commodity prices will weigh on economic growth. Additionally, investors are scrambling to analyse the impact of Russia’s invasion of Ukraine and harsh economic sanctions against Russia

However, a strong dollar and rise in US treasury yields prevented further upside in gold prices

Gold is likely to continue its positive bias for the day amid gloomy global market sentiments and worries over rising inflationary pressure. Investors fear that soaring commodity prices will hurt global economic growth, which is already struggling with higher inflation. Market participants are even worried that uncertainty in the market has clouded the outlook for central banks seeking to tame inflation by monetary tightening. Markets will remain vigilant ahead of Jolts job openings data from the US

Base Metal Outlook

Base metal prices retreated from their highs amid weak global market sentiments and strong dollar. Further, market participants fear that soaring commodity prices will weigh on economic growth

LME suspended trade in nickel after prices doubled to more than $100,000 per tonne. Nickel prices had rallied amid worries over supply disruption due to escalating Russia-Ukraine conflict and mounting sanctions against Russia

Industrial metal prices are expected to correct from their highs amid risk aversion in global markets. Further, investors fear that ongoing war and harsh sanctions on Russia for invading Ukraine will have a ripple effect on the global economy. However, sharp downside may be cushioned on worries over supply disruption and declining inventories in LME registered warehouses. Market participants will assess how aggressively central banks across the globe will act to tame stubbornly high inflation without hampering economic growth. Meanwhile, markets will remain vigilant ahead of jobs data from the US

Energy Outlook

Crude oil prices rose as US President Joe Biden announced a US ban on Russian oil and other energy imports, fuelling supply concerns. Furthermore, the UK followed the US in banning Russian oil and oil products. Further, Shell said it will stop buying Russian crude on the spot market and will not renew its term contracts, unless directed by governments

Additionally, Russian Deputy Minister Alexander Novak had said it is absolutely clear that rejection of Russian oil would lead to catastrophic consequences for the global markets. A surge in prices would be unpredictable and would take Europe more than a year to replace the volume of oil it receives from Russia

Crude oil is expected to continue its rally for the day on worries over supply disruption as the US and UK moved to ban Russian oil imports and as inventories continued to fall worldwide. Further, fading expectations of imminent return of Iranian crude oil in the market is expected to continue to support prices. Additionally, market participants are gauging world oil production capacity to replace Russian oil

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