MCX gold prices dropped by 1.80% yesterday on an elevated dollar - ICICI Direct
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Daily Commodity Outlook
Bullion Outlook
• MCX gold prices dropped by 1.80% yesterday on an elevated dollar and solidifying bets for an aggressive interest rate hike from the US Federal Reserve
• Further, a sharp rise in US 10 year’s treasury yields pressurised bullion prices
• MCX gold prices are expected to trade with a negative bias for the day amid strong US dollar. It is likely to break the key support level of | 50,950 to trade in a downward trend towards the level of | 50,550 in coming trading sessions
• Additionally, silver prices are likely to take cues from gold prices and trade in a downward trend towards the level of | 58,000
Base Metal Outlook
• MCX copper prices advanced almost 1.00% yesterday after the latest copper inventory data from the LME and the SHFE showed that the LME copper inventory fell to a new low of 102,000 mt in more than five months on September 16, while SHFE copper inventory fell to a new low in more than eight months
• However, poor demand prospects, particularly in top consumer China, restricted further upside in copper prices
• We expect copper prices to trade with a negative bias for the day amid surveys of purchasing managers in the manufacturing sector of China showed a faster contraction than expected
Energy Outlook
• MCX crude oil prices edged lower on Monday as investors weighed economic storm clouds could trigger a global recession and erode fuel demand against potentially tighter supply
• Moreover, crude oil prices were pressurised after Saudi Aramco said they will keep supplies to Asian customers steady despite likely production cuts by tapping on inventories
• We expect MCX crude oil prices to trade with a positive bias for the day amid expectations that demand in Asia for crude oil is rising after data showed Asia's imports of crude oil recovered in September
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