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Bullion Outlook

• Gold prices declined 1.59% on Monday on the back of rise in dollar index and higher US bonds yields

• US benchmark 10 year treasury yields advanced to 1.58%, increasing the opportunity cost of holding non yielding bullion

• MCX gold prices are likely to correct further towards | 47,400 levels due to rise in US treasury yields and on improved risk appetite in the global markets. However, a sharp downside may be prevented on higher inflation and worries over Omicron Coronavirus variant

• Silver prices are expected to take cues from gold prices and are likely to drag down towards | 60,800 level for the day

• Further, investors will focus on JOLTs Job openings data from US

Base Metal Outlook

• Copper prices fell 0.72% on Monday amid stronger dollar index and on disappointing IHS Markit manufacturing data from US. Prices were also pressurised on rapid spread of the Omicron Coronavirus variant, which raised concerns over its impact on economic activity

• US IHS Markit Manufacturing Purchasing Manager’s Index (PMI) declined to 57.7 in December, which was lower than previous month’s 58 level

• The dollar index surged 0.75% on Monday. A stronger dollar makes greenback priced metals expensive for holders of other currencies

• MCX copper prices are likely to trade in the range of | 728 to 746 levels with a negative bias due to demand concerns and on expectations of disappointing ISM manufacturing PMI data from US. However, a sharp downside may be prevented on falling LME inventories

Energy Outlook

• Crude oil prices gained 0.84% on Monday supported by hopes of a further demand recovery in 2022, despite Opec+ agreeing to increase oil output and concerns on rising Omicron variant Coronavirus cases

• Further, oil gained some support from an outage in Libya, where output will be cut by 200,000 barrels per day for a week due to pipeline maintenance

• The Omicron Coronavirus variant has brought record case counts and dampened New Year festivities worldwide, with more than 4,000 flights cancelled on Sunday

• MCX crude oil prices are likely to correct towards | 5500 level due to expectations of higher supply from Opec+ countries. Investors will anxiously await the outcome of Opec+ meeting due today

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