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Bullion Outlook

• Gold prices gained 0.13% on Tuesday amid a decline in US treasury yields. Further, concerns over the spread of the Omicron Coronavirus variant and elevated inflation boosted the demand for the precious metal

• US benchmark 10 year treasury yields declined to 1.45, reducing the opportunity cost of holding non yielding bullion

• MCX gold prices are likely to trade in a range of | 47,900 to 48,350 levels with a positive bias on the back of rising inflation and on decline in US treasury yields. However, sharp upside may be capped on a stronger dollar index and increase in risk appetite in the global markets

• Silver prices are expected to take cues from gold prices and rise further towards | 63,500 levels for the day

Base Metal Outlook

• Copper prices declined 0.18% on Tuesday amid a stronger dollar index and worries over the impact of the Omicron variant

• On the supply side, Zijin Mining has started production at its Qulong copper mine in Tibet, one of the largest in China. Further, the Philippines has lifted a four year old ban on open pit mining for copper, nickel and other complex ores

• China will keep its monetary policy flexible next year as it seeks to stabilise growth and lower financing costs for businesses amid growing economic headwinds, the central bank said on Monday

• MCX Copper prices are likely to trade in a range of | 735 to 758 levels with a negative bias due to demand concerns over the Omicron variant and on expectations of disappointing pending home sales data from the US. However, a sharp downside may be prevented on China’s flexible monetary policy and decline in inventories

Energy Outlook

• Oil prices surged 0.66% on Tuesday despite the rapid spread of the Omicron Coronavirus variant

• Further, Omicron induced staff shortages led to thousands of flight cancellations over the Christmas weekend in the US

• According to the Commodity Futures Trading Commission (CFTC) data released on Monday, large speculators reduced their net long positions in WTI crude oil to 340,255 from 347,137 over the previous week, indicating bearish sentiment in the crude oil market

• MCX Crude oil prices face strong resistance at | 5,760 levels. As long as they sustain below this level they are expected to correct towards | 5,550 levels for the day, mainly due to fresh travel restrictions in many countries. However, a sharp downside may be prevented on expectations of a decline in US crude oil inventories

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