MCX gold prices slipped around 0.80% on Tuesday amid a sharp rise in US dollar index - ICICI Direct
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Bullion Outlook
* MCX gold prices slipped around 0.80% on Tuesday amid a sharp rise in US dollar index and on rebound in US 10 year bond yields
* Moreover, better than expected macroeconomic data from the US continued to pressurise the bullion prices on higher side. CB Consumer confidence data increased to 106.40 levels in May 2022 compared to forecasts level of 103.90
* However, pessimistic sentiments in US markets prevented further downsides in precious metal prices
* MCX gold prices are likely to slip further towards | 50,500 for the day due to stronger dollar index. Silver prices are also expected to take cues from gold prices and may correct towards | 60,300 levels
* Additionally, investors will keep an eye on JOLTs Job Openings data from the US
Base Metal Outlook
* LME Copper and other industrial metals prices retreated on Tuesday, pressured by a firm dollar and worries about a potential recession sparked by interest rate hikes to combat elevated inflation
* At the same time, weaker sentiments in the global markets weighed on industrial metal prices
* However, a sharp decline in LME inventories along with improved factory order activity from the China continued to support the base metal prices on lower side. The official China’s manufacturing PMI rose to 49.60 in May 2022 compared to 47.40 in the previous month due to easing tough lockdown restrictions
* MCX Copper prices are expected to correct further towards | 768 levels for the day on expectation of unsatisfactory ISM manufacturing data from the US
Energy Outlook
* WTI crude oil prices declined more than 1.5% on Tuesday after a report that some Opec members were exploring the idea of suspending Russia's participation in an oil-production deal
* Further, oil prices remained under pressure due to significant increase in US oil production. Oil production in the US surged to 11.90 million bpd in May 2022 compared to 11.70 million bpd in the March 2022, highest since November 2021
* However, European Union leaders have agreed an embargo on Russian crude oil imports that will take full effect by end of the year
* MCX crude oil prices are facing strong hurdle at mean +2* sigma levels of | 9,200. As long as they sustain below this level, they are likely to correct towards | 8,750 for the day
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