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Bullion Outlook

• Gold prices tumbled on Tuesday amid a strong dollar. Also, bullion prices were pressurised after Federal Reserve Chair Jerome Powell said inflationary pressures are running higher than expected and left the door open to more interest rate hikes than previously planned

• Gold is likely to trade with a negative bias for the day on the back of strong US dollar and rising US treasury yields. Further, bullion prices may be pressurised as hawkish comments from Fed Chair Jerome Powell raised expectations of a 50 basis point interest rate increase in March meeting. As per CME’s Fed watch tool, financial markets have priced in a 70% chance of 50 bps rate hike in upcoming meeting. MCX gold is expected to break the key support level of 54,900 to continue its downward trend towards the level of 54,700

• MCX silver prices dropped by more than 3.30% and is expected to continue its downward trend towards the level of 61,500

Base Metal Outlook

• Copper and other industrial metals prices fell on Tuesday as Imports to China tumbled 10.2% from a year earlier to US$389.42 billion in January-February 2023, compared with market consensus of a 5.5% fall. Additionally, China’s unwrought copper imports in January and February were down 9.3% from a year earlier

• Further, the potential resumption in supplies from a major mine in Peru, weighed on copper prices

• Furthermore, copper prices were pressurised on a strong dollar and the relatively slow revival of demand in China after it abandoned strict Covid-19 controls

• Copper is expected to trade with a negative bias for the day amid strong dollar coupled with ease in supply concerns from Peru. Additionally, prices may slip on weak sentiment over Chinese economic growth and disappointing import data. MCX copper is likely to break the key support level of 744 to continue its downward trend towards the level of 741 for the day

Energy Outlook

• Crude oil prices dropped on Tuesday after hawkish comments from US Federal Reserve Chair Jerome Powell. He said Fed would need to increase rates more than expected in light of recent strong economic data

• Meanwhile, US Energy Information Administration said in its Short Term Energy Outlook on Tuesday, the US crude oil production and demand will rise in 2023 as Chinese travel drives consumption

• Crude oil is expected to trade with a negative bias for the day amid strong US dollar and weaker than expected Chinese import data. Further, data also showed China’s oil imports fell 1.3% YoY in January and February raising concern over demand in top oil importer. MCX crude oil is likely to break the key support level of 6350 to continue its downward trend towards the level of 6300 for the day

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