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Daily Commodities Outlook

Bullion Outlook

• Gold prices climbed more than 0.50% on Tuesday amid hopes for less aggressive interest rate hikes from the US Federal Reserve going forward

• However, sharp upside was capped on surge in US 10 years treasury yields and strong dollar

• Gold prices are expected to trade with a negative bias for the day amid rise in US treasury yields and strong dollar. Further, market participants will keep an eye on Fed Chair Powell speech at Brookings institution event and major economic data from US to get the cues on central bank interest rate hiking path. MCX Gold is likely to break the key support level of ? 52,300 to trade in downward trend towards the level of ? 52,150

• Additionally, silver prices are expected to take cues from gold prices and trade in downward trend towards the level of ? 60,800

Base Metal Outlook

• LME Copper and aluminium prices edged higher on Tuesday on hopes that protests against COVID-19 curbs in China will lead to a faster easing of the rules that have stifled economic growth and metals demand

• Further, copper prices rallied as support for the property sector in China, the world's top metals consumer brightened the demand outlook

• Furthermore, drop in copper and aluminium LME warehouse inventories buoyed prices

• MCX Copper prices are expected to trade with a positive bias for the day as China has stepped up support in recent weeks for its embattled property sector, including offering cheap loans to support developers' bonds

Energy Outlook

• WTI crude oil prices jumped by almost 1.30% on Tuesday on hopes for relaxation of China's strict COVID-19 controls after rare protests in Chinese cities over the weekend

• Moreover, European Union governments failed to agree on a price cap on Russian seaborne crude oil, as Poland insisted that the cap had to be set lower than proposed by the G7

• However, sharp upside was capped on concerns that OPEC+ would keep its output unchanged at its upcoming meeting

• Oil prices are expected to drop for the day on expectations that top oil exporter Saudi Arabia may cut crude prices for Asia in January following a bearish trading cycle in the Middle East spot market, on concerns over weaker demand in China and an increase of Russian crude in Asia after Dec. 5. Additionally, traders will closely watch crude oil inventory data from the US and also asses the impact of a looming Western price cap on Russian oil

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