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Daily Commodities Outlook

Bullion Outlook

• Gold prices hovered near a three month high amid dollar weakness, decline in US 10-year treasury yields and geopolitical tension

• However, sharp upside was capped as retail sales rose sharply in October, a sign of economic strength that may provide room for Fed to keep raising rates to combat soaring inflation. Retail sales surged 1.3% in October 2022 beating market expectation of 1%

• Gold prices are expected to trade with a positive bias for the day on the back of weakness in the dollar and pessimistic global market sentiments. MCX gold prices are making higher high and higher low pattern. Price is well placed above the support level of ? 52880 suggesting it will rally towards ? 53,480 level

• MCX Silver prices are expected to take cues from gold prices and likely to rise further towards 62,700 level for the day

Base Metal Outlook

• MCX copper prices fell and moved lower towards ? 689 level on Wednesday as weak economic data from China was another sign of low demand

• Average new home prices in China dropped 1.6% year on year in October 2022, after a 1.5% decline a month earlier. It was the sixth straight month of decline in new home prices, the steepest pace in the sequence

• Additionally, rising geopolitical tension weighed on investors risk appetite, while rising Covid-19 cases in China fuelled demand concerns

• MCX copper prices are expected to trade with a negative bias for the day on expectation of disappointing housing data from US and risk aversion in global markets. MCX copper prices are facing strong resistance near ? 698. As long as it sustains below this level, it may slip back to ? 681 levels

Energy Outlook

• MCX crude oil prices fell 1.57% as Russian oil shipments through the Druzhba pipeline to Hungary restarted and as rising Covid-19 cases in China weighed on sentiments

• However, sharp downside was cushioned as US stocks fell more than expected. As per EIA US crude oil inventories fell by 5.4 million barrels last week compared to expectation of 2.0 million barrel drop

• Crude oil prices are expected to trade with a negative bias for the day on worries that rising Covid-19 cases in China may lead to wider lockdowns and hamper economic activity. Additionally, investors fear that slowdown in the global economic growth may hurt crude oil demand. Meanwhile, weakness in dollar, rising geopolitical tensions and decline in crude oil stockpiles may prevent further downside in prices

• MCX crude oil is facing strong resistance near ? 7020 level. As long as it sustains below this level, crude prices may slip back to ? 6780 levels

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