MCX copper prices declined 0.83% on Tuesday amid strong dollar - ICICI Direct
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Bullion Outlook
Comex gold prices declined 0.75% on the back of a strong dollar, rise in risk appetite in US markets and improved economic data from the US. Further, hawkish statements from Fed officials added downside pressure
US retail sales surged 1.7% in October 2021, the highest gain since March 2021
The dollar index surged by 0.40% on Tuesday, making bullion more expensive for holders of other currencies
MCX gold prices are likely trade in a range of 48,600 to 49,300 with a negative bias due to elevated US treasury yields and a stronger dollar index. However, sharp downsides may be prevented amid concerns over high inflation and on worries that rising Covid-19 cases in Europe may dampen economic recovery
Base Metal Outlook
MCX copper prices declined 0.83% on Tuesday amid strong dollar and as China had announced that it would continue raising coal supply to cool prices
The premium of LME cash copper over the three-month contract declined to $32.50 a tonne from $1,103.50 a month ago, suggesting that the tightness in nearby supplies has reduced
According to the Commodity Futures Trading Commission (CFTC) released on Monday, money managers reduced their net long position in copper contracts to 22,789 from 32,335 over the previous week, indicating bearish sentiment in the copper market
MCX copper prices are likely trade in the range of 720 to 740 levels with a negative bias on the back of a strong dollar. Further, investors will remain cautious ahead of building permits and housing starts data from the US
Energy Outlook
Crude oil prices ended mixed on Tuesday amid tightness in global oil markets and concerns over rising Covid-19 cases in Europe
According to the IEA report, world oil demand is expected to increase by 5.5 mb/day in 2021. On the supply front, global output is set to rise 2.7 mb/day in Q4CY21
US crude oil inventories are expected to show weekly US crude supplies increased by about 1.4 million barrels last week
US natural gas futures surged 2.69% on Tuesday amid Germany's energy regulator suspended approval of Nord Stream 2 natural gas pipeline from Russia to Germany
MCX crude oil prices are likely trade in the range of 5,800-6100 levels with a negative bias due to a stronger dollar index, higher supply from US SPR and expectations of rise in US crude oil stockpiles
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