IGI Logo

GLOBAL MARKET ROUND UP

* Safe haven assets were in strong demand amid growing recessionary fears. This helped boost sentiment in the precious metals sector. Thirty-year Treasuries dropped more than 10bp to a three-month low while yields on the 10-year were also lower. Combined with the weakness in the USD, gold received strong support.

* China’s optimism continued to boost sentiment across commodity markets, aided by a weaker dollar. This helped shrug off concerns of broader weaker economic growth amid central bank tightening.

* Asian stocks are set for a cautious start after US shares declined and the Treasury market flashed growing recession fears. Asian currencies gained against a broadly weaker greenback.

* The selloff in crude oil markets continued amid a weakening economic backdrop and low liquidity across markets. Distillate inventories in the US rose by more than 6mbbl last week, according to Energy Information Administration data. Gasoline inventories were also higher by 5.3mbbl, indicating weaker demand.

* Base metals rose as optimism over China’s reopening gained traction. Beijing announced wide-ranging relaxations to President Xi Jinping’s contentious zero-COVID restrictions, including for the first-time home quarantine.

Commodity Daily| BULLION

* Gold was little changed after rising 0.9% in the previous session on weakness in Treasury yields, with traders looking to Friday’s US producer price report to gauge the Federal Reserve’s next monetary policy moves. Bullion on Wednesday rose after Treasury yieldsslid on softer unit labour costs and geopoliticaltension

* China reported an increase in its gold reservesfor the first time in more than three years, shedding some light on the identity of the mystery buyersin the bullion market

* The gold-to-crude ratio could favour bullion in 2023, particularly if the global economy continues to deteriorate and central banks ditch campaignsto tighten monetary policy.

Trading Strategy: Bullions are expected to trade higher following weaker the dollar. MCX Gold Feb future is having support at 53200 and resistance at 54600. MCX Silver March fut is having resistance at 66900 and support at 65200.

Commodity Daily| ENERGY

* Oil rose after a four-day drop as investors weighed the impact of China’s moves to ease virus curbs against a looming US slowdown. West Texas Intermediate climbed toward $73 a barrel after plunging more than 11% over the previousfoursessions as a raft of US bankssounded the alarm on a possible recession.

* Adding to the downbeat mood, the US Energy Information Administration reported on Wednesday that distillate and gasoline inventories expanded last week, indicating weaker demand in the world’s largest economy

Trading Strategy: MCX crude oil Dec fut is expected to witness short covering bounce amid an oversold condition on the short-term chart. It has resistance at 6210 and support at 5880. MCX Natural gas Dec fut is having resistance at 503 and support at 450

Commodity Daily| BASE METALS

Base metals rose as optimism over China’s reopening gained traction. Beijing announced wide-ranging relaxations to President Xi Jinping’s contentious zero-COVID restrictions, including for the first-time home quarantine. Copper led the sector higher amid hopes the new measures would boost domestic demand. This comes amid signs of restocking by consumers ahead of the easing restrictions. China’s commodity imports were stronger than expected in November. Refined copper purchases rose by 5.8% y/y to 540kt, the highest for this year, Higher processing charges have supported concentrate imports, which rose 10% y/y

Trading Strategy: The trend for base metals remains bullish. MCX Copper is having resistance at 711 and support at 694. MCX Aluminium is having resistance at 218 and support at 213. Among the metals lead is looking slightly week while zinc and copper iswell placed for bulls.

To Read Complete Report & Disclaimer Click Here

Please refer disclaimer at https://www.hdfcsec.com/article/disclaimer-1795

SEBI Registration number is INZ000171337

Views express by all participants are for information & academic purpose only. Kindly read disclaimer before referring below views. Click Here For Disclaimer