Gold prices traded slightly positive on Wednesday amid concerns over rising Omicron Coronavirus cases - ICICI Direct
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Bullion Outlook
• Gold prices traded slightly positive on Wednesday amid concerns over rising Omicron Coronavirus cases. However, sharp upsides were capped on improved macroeconomic data from the US
• The dollar index declined 0.36% on Wednesday, making bullion cheaper for holders of other currencies
• According to ADP National Employment report released on Wednesday, private payrolls jumped by 807,000 last month, the most in seven months
• MCX gold prices are likely to rise further towards | 48,400 levels due to weakness in the dollar index and on higher inflation
• Silver prices are expected to take cues from gold prices and are likely to rise towards | 63,500 level for the day. Meanwhile, investors will keep an eye on initial jobless claims data from the US
Base Metal Outlook
• Aluminium prices gained 2.17% on Wednesday as expectations of large deficits were reinforced by high power prices
• European prompt power prices rose on Wednesday as day to day wind power supply in Germany was forecast to halve while demand in France was expected to increase due to lower temperatures
• Moreover, the aluminium market is also focused on China where coal prices have been driven up by a ban on exports by Indonesia
• Further, stocks of aluminium in LME approved warehouses at 926,800 tonnes have dropped more than 50% since the middle of March, which has supported prices on the lower side
• MCX Aluminium prices are likely to rally further towards | 235 levels for the day due to supply deficit and on falling LME inventories
Energy Outlook
• Oil prices surged 1.04% on Wednesday as Opec+ producers stuck to an agreed output target rise for February and on a decline in US crude oil inventories • According to EIA data released on Wednesday, US Crude oil inventories fell by 2.14 million barrels in the week to December 31 to 417.9 million barrels, which was less than expected draw level of 3.28 million barrels
• The US reported nearly 1 million new Coronavirus infections on Monday, the highest daily tally of any country in the world and nearly double the previous US peak set a week earlier
• MCX crude oil prices are likely to trade in the range of | 5700 to 5880 levels with a positive bias due to consistent decline in crude oil stockpiles. However, demand concerns over Omicron variant may continue to put pressure on the higher side
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