Gold prices slipped 0.27% on Wednesday amid elevated US treasury yields and a stronger dollar - ICICI Direct
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Bullion Outlook
• Gold prices slipped 0.27% on Wednesday amid elevated US treasury yields and a stronger dollar. However, a sharp downside was prevented on disappointing retail sales data from the US
• US retail sales increased 0.3% in November well below market expectations of 0.8% after a surge of 1.8% in October as Americans started holiday shopping early to avoid shortages and paying more for goods
• The dollar index surged 0.07% on Wednesday, making bullion expensive for holders of other currencies
• MCX gold prices are likely to trade in a range of | 47,900 to 48,300 levels with a mixed bias on elevated US treasury yields. However, a sharp downside may be prevented on weakness in the rupee against dollar and risk aversion in global markets. Also, investors will keep an eye on series of macroeconomic data from US
Base Metal Outlook
• Copper prices slipped 2.41% on Wednesday weighed down by weak demand as China's property market encountered more headwinds in November and a cash crunch among developer
• According to the National Bureau of Statistics (NBS) data released on Wednesday, new home prices fell 0.3% MoM in November 2021, the biggest decline since February 2015
• Meanwhile, Peru's government failed to host a planned meeting between the Las Bambas copper mine and a local community that has been blocking the road from the mine, threatening a complete production halt
• MCX copper prices are likely to trade in a range of | 712 to 728 levels with a negative bias due to concerns over China's property market and recovering LME inventories. However, a sharp downside may be prevented on supply disruptions from Peru’s Copper mine
Energy Outlook
• Crude oil prices declined 0.92% on Wednesday after WHO said Covid-19 vaccines may be less effective against the Omicron variant. Further, prices remained under pressure on growing signs that supply growth will outpace demand next year
• US natural gas futures rose more than 4.30% on Wednesday amid higher US liquefied natural gas exports and forecasts for more heating demand this week than previously expected
• According to EIA weekly report released on Wednesday, US crude oil inventories declined by 4.58 million barrels per day over the last week, more than expected draw level of 2.08 million barrels per day
• MCX crude oil prices are likely to trade in a range of | 5,250 to 5,450 levels with a negative bias due to higher global supply and demand concerns over the Omicron variant
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