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Daily Commodities Outlook

Bullion Outlook

• Gold prices rose on Tuesday amid a retreat in US treasury yields, with traders awaiting further direction from the Federal Reserve's interest rate hike strategy

• Further, bullion prices were supported as the US trade gap widened to a four-month high of $78.2 billion in October 2022, following an upwardly revised $74.1 billion deficit in September. Exports fell 0.7%, a second consecutive monthly fall, to $256.6 billion, lowest value since May

• Gold prices are expected to trade with a positive bias for the day amid risk aversion in global markets and decline in US treasury yields. MCX Gold prices are likely to surpass the hurdle of 54,000 to continue their upward trend towards the level of 54,250

• Additionally, MCX Silver prices are expected to take cues from gold prices and trade towards 66,500 level

Base Metal Outlook

• Copper and aluminium prices advanced on Tuesday as hopes grew that demand will rebound in top consumer China after more cities eased Covid19 restrictions

• Further, a sharp decline in copper and aluminium inventories at LME registered warehouses supported prices

• However, sharp upside was capped on a strong US dollar and pessimistic global market sentiments

• Copper prices are expected to trade with a negative bias on a strong dollar and risk aversion in global markets. Meanwhile, declining copper inventories and optimism surrounding China’s reopening may prevent a sharp fall in prices. MCX Copper prices are likely to break support level of 695. As long as it sustains below this level copper may slip back to 688 levels

Energy Outlook

• Crude oil prices slid to their lowest since January on Tuesday, extending a downward trend as growing concerns about global demand offset any bullish effects from an EU-led price cap on Russian oil sales

• Further, EIA projected that US crude oil production in 2023 would rise to 12.34 million bpd, compared with a record 12.29 million bpd in 2019

• Moreover, reports showed Russia's January-November oil and gas condensate production rose 2.2% from a year earlier to 488 million tones, also weighing on crude oil prices

• Oil prices are likely to trade with a negative bias for the day amid a strong dollar and prospects of higher interest rates. Further, market sentiments are expected to remain clouded by concerns about weak global demand. Meanwhile, traders will remain cautious ahead of the crude oil Inventories data from the US, which is expected to drop by 3.884 million. MCX crude oil may face strong resistance near | 6300 levels. As long as it sustains below this level, prices may slip further till | 6050 levels

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