U.S. Gold prices have fallen below a key support level - HDFC Securities
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GLOBAL MARKET ROUND UP
* Commodities remained under pressure amid China’s battles with COVID-19. Protests added to demand outlook uncertainty for many commodities.
* Gold steadied as protests against China’s Covid Zero policy eased, while Federal Reserve officials said that more rate hikes are coming. On Monday, the strengthening greenback helped push bullion lower amid concern over China’s worsening Covid situation.
* Crude oil fell toward $76 a barrel after closing up 1.3% on Monday following a report that the Organization of Petroleum Exporting Countries and its allies may consider deeper supply curbs. Oil is on course for the biggest monthly loss this year as tighter monetary policy sets the stage for a global slowdown that could endanger energy consumption. Meanwhile, in Europe talks between European Union diplomats to agree on a price cap on Russian oil have stalled.
* Copper led the base metals sector lower and risk appetite waned amid rising COVID-19 cases in China. The Chinese government stepped up restrictions to contain the spread of the virus, which has led to widespread protests from residents.
* Investors are now looking ahead to Jerome Powell’s speech on Wednesday, with many economists expecting he’ll cement bets that the Fed will slow its pace of rate increases next month.
Commodity Daily| BULLION
U.S. Gold prices have fallen below a key support level today after hawkish comments from Federal Reserve officials brewed some uncertainty over the path of U.S. monetary policy. St. Louis Fed President James Bullard said on Monday that the Fed has “a ways to go” on interest rate hikes, and could keep hiking them and hold them until 2024 to combat inflation. He also reiterated his view that rates need to rise by at least another 1% to between 5% and 5.25%. Their comments boosted the dollar, with the greenback jumping nearly 0.7% on Monday. This weighed on most metal markets, particularly gold. Gold saw little haven demand this week, even as unprecedented civil unrestin China raised concerns over global economic disruptions.
Trading Strategy: Bullions is expected to remain rangebound in the near term. The previous swing high is placed at 52120. Below 52120, Gold Feb Fut is expected to extend the fall towards the next support of 51990 and 51604. MCX Silver March Fut hassupport at 60164.
Commodity Daily| ENERGY
Oil declined after Federal Reserve policymakers signalled further increases in interest rates, and traders tracked developments in China as Beijing moved to suppress anti-Covid Zero protests. WTI crude oil fell toward $76 a barrel after closing up 1.3% on Monday following a report that the Organization of Petroleum Exporting Countries and its allies may consider deeper supply curbs when they meet this weekend. US central bank luminaries including New York Fed President John Williams stressed they will raise borrowing costs further to curb inflation.
Trading Strategy: The energy complex is expected to trade right ahead of OPEC meeting. MCX crude oil Dec. fut. is expected to trade higher with resistance at 6550 and support at 6110. MCX Natural gas Dec fut has support at 565 and resistance at 625.
Commodity Daily| BASE METALS
Industrial metal prices ended on a mixed note on Thursday with Copper and Aluminium falling marginally. Nickel and zinc managed to buck the trend, finishing higher amid signs of stronger demand and low inventories. Copper, sinking as much as 2% on the back of protests in China against the zero covid policy, recovered sharply during the later part of the day. Profit booking in the equity markets and the rise in the greenback on Monday also weighed on most metal markets, particularly gold.
Trading Strategy: Technical set-up remains strong for the base metals. Immediate support for MCX Copper December is placed at Rs. 660 and resistance at Rs. 681 and 690. MCX Zinc Dec support lies at Rs. 256, resistance at Rs. 270. MCX AluminiumDec supportlies at Rs. 199 with resistance at Rs. 208 and 214.
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