MCX copper and other base metals prices slumped on Tuesday - ICICI direct
Daily Commodity Outlook
Bullion Outlook
MCX gold prices recovered marginally after Monday’s huge losses amid weakness in in the dollar index and US bond yields
• However, expectations of further interest rate hike by the Federal Reserve in the face of high inflation, prevented further upside in bullion prices
• MCX gold prices are expected to trade with a positive bias for the day amid weakness in the US dollar. It is likely to break the key resistance level of | 51,350 to continue trading in an upward trend towards the level of | 51,450 in the coming trading sessions
• Additionally, investors will closely watch PPI data from the US for more understanding
Base Metal Outlook
• MCX copper and other base metals prices slumped on Tuesday on rising worries that an economic downturn will curb metals demand
• Further, an uptick in Covid cases in top metals consumer China also weighed on base metals prices
• However, weakness in the US dollar index cushioned base metal prices
• We expect copper prices to trade with a negative bias for the day amid a rise in Covid cases in top metals consumer China that may dent demand for base metals
Energy Outlook
• MCX crude oil prices fell about 3% on Tuesday, extending the previous session's decline of almost 2% as recession fears and a flare-up in Covid-19 cases in China raised concerns over global demand
• However, hedge funds and other money managers purchased the equivalent of 62 million barrels in the six most important petroleum futures and options contracts in the week ending October 4, preventing further downside
• We expect MCX crude oil prices to trade with a negative bias for the day on growing fears that a slowing global economy will hamper fuel demand
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