Gold prices eased 0.22% on Friday amid an uptick in US Treasury yields and a stronger dollar - ICICI Direct
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Bullion Outlook
* Gold prices eased 0.22% on Friday amid an uptick in US Treasury yields and a stronger dollar. However, a sharp downside was prevented on disappointing retail sales data from the US
* US retails sales tumbled by 1.9% in December as Americans struggled with shortages of goods due to supply chain bottlenecks and an explosion of Covid-19 infections
* US 10 year Treasury yields firmed, while the dollar rose 0.4% against its rivals, making bullion costlier for overseas buyers
* MCX gold prices are likely to correct further towards | 47,500 levels due to elevated US treasury yields and strong dollar
* Silver prices are expected to take cues from gold prices and likely to get dragged down towards | 61,000 level for the day.
Base Metal Outlook
* Copper prices declined 1.41% on Friday, pressured by prospects of an interest rate hike by the U S Federal Reserve as soon as March
* Further, China’s imports of unwrought copper and copper products slipped in 2021 from the previous year's record, though imports of copper concentrate hit a historic high.
* At the same time, China’s economic growth is likely to slow to 5.2% in 2022, before steadying in 2023, as the central bank steadily ramps up policy easing to ward off a sharper downturn
* However, On warrant LME copper inventories 78,000 tonnes, down about 67% from August highs
* MCX copper prices are likely to correct towards | 732 levels for the day due to worries over global demand. However, a sharp downside may be prevented on declining LME inventories
Energy Outlook
* Oil futures advanced 2.63% on Friday mainly due to supply constraints and worries of a Russian attack on neighbouring Ukraine
* US officials voiced fears on Friday that Russia was preparing to attack Ukraine if diplomacy failed. Russia has massed 100,000 troops on Ukraine's border
* China plans to release oil reserves around the Lunar New Year holidays between January 31 and February 6 as part of a plan coordinated by the US with other major consumers to reduce prices
* Meanwhile, US oil rigs rose to 492 this week, their highest since April 2020, while gas rigs rose two to 109, their highest since March 2020
* MCX crude oil prices are likely to trade in the range of | 6150 to 6350 levels with a positive bias amid concern over tight supply and rising geopolitical tensions between Russia and Ukraine
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