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Bullion Outlook

Gold prices surged more than 2% on Friday as a banking crises wave shook global markets

• Further, bullion prices were supported on a drop in the US dollar index and sharp decline in US 10 years treasury yields

• Moreover, prices rose as the University of Michigan consumer sentiment for the US dropped for the first time in four months to 63.4 in March 2023 and well below forecasts of 67

• Gold is likely to trade with a positive bias for the day amid drop in US treasury yields across curve and weak US dollar. Further, demand for safe haven may increase on fears over a contagion risk despite a rescue deal for Credit Suisse and support from global central banks. MCX gold is expected to continue its upward trend towards the level of 59700

• MCX silver prices rose nearly 3.00% and are likely to continue their upward trend towards the level of 69,300

Base Metal Outlook

• Copper prices edged up on Friday but not enough to offset losses earlier in the week as a turmoil in the banking sector raised the threat of bank failures and slower economic growth

• Meanwhile, sharp upside was prevented as industrial production in the US declined 0.2% YoY in February 2023, the first annual decline since February 2021, prompted by a 7.6% slump in utilities output and a 1% drop in manufacturing

• Copper is expected to trade with a negative bias for the day amid lingering fears over a recession on account of impact of tighter monetary policies. Further, market participants still worry over a contagion risk despite support from global central banks. In coordination with central banks, the US Federal Reserve offered daily currency swaps. MCX copper is likely to slip back till 748 level as long as it sustains below 756 level (50- day EMA)

Energy Outlook

• Crude oil prices dropped on Friday as banking sector fears caused both benchmarks to record their biggest weekly declines in months

• Further, crude oil prices were pressurised as the total active US rig count, rose by eight to 754 last week, according to Baker Hughes

• Crude oil is expected to trade with a negative bias for the day amid loss of confidence in the stability of the financial system and worries about possible recession. Meanwhile, Iraq’s Prime Minister and the Opec Secretary stressed the need to coordinate among oil exporting nations to ensure prices do not fluctuate. MCX Crude oil prices are likely to break key support level of 5450 to continue their downward trend towards 5400 level

• MCX Natural gas prices tumbled almost 6.20% and are likely to continue their downward trend towards the level of 190

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