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Bullion Outlook

• Gold prices surged by 0.89% in the previous week on the back of Gold vs. Dollar Index concerns over Omicron Coronavirus variant and decline in US treasury yields. Further, prices were supported by disappointing jobless claims data from the US. However, a sharp upside was capped on rally in the dollar index

• Meanwhile, the annual rate of US producer price index accelerated to 9.6% in November from 8.8% in October, which has also boosted the demand for bullion as a hedge against rising inflation

• Further, the number of Americans filing new claims for unemployment benefits increased to 206,000 over the past week

• However, the dollar index surged 0.24% in the last week after the US Federal Reserve signalled three interest rate hikes by the end of 2022, making bullion more expensive for holders of other currencies

Gold Outlook

• Gold prices are likely to trade in the range of | 48,200-49,500 levels with a positive bias amid higher inflation. Further, concerns over the Omicron Coronavirus variant and risk aversion in global markets may continue to support gold prices. Meanwhile, investors will focus on GDP data from US

Silver Outlook

• Silver prices are expected to take cues from gold prices and likely to rise further towards | 64,000 levels in the coming week

Base Metal Outlook

• Copper prices surged by 1.38% last week as the US Federal Reserve's upbeat reading of the world's largest economy stoked risk appetite

• Further, supply disruptions at a major mine in Peru lifted the red metal prices. MMG Las Bambas said on Thursday it would shut production at its copper mine in Peru from December 18, after it failed to reach an agreement with a Peruvian community blocking a transport road used by the facility for almost 30 days

• However on the demand side, largest consumer China’s manufacturing province Zhejiang is fighting against its first Covid-19 cluster this year, with more than a dozen Chinese companies suspending production due to tightened Covid-19 curbs

• Meanwhile, LME registered warehouse inventories of copper increased to 89,475 tonnes from 81,775 tonnes over the past week

Copper Outlook

• MCX copper prices are likely trade in a range of | 720-750 levels with mixed bias on concerns that new Covid-19 variant may hamper demand. However, sharp downside may be prevented on supply disruptions from Peru’s copper mine. Further, investors will keep an eye on New home sales data from US

Aluminium Outlook

• Aluminium prices are expected to trade with a mixed bias due to rise in the dollar index. However, sharp downside may be prevented on decline in LME inventories. On MCX, aluminium prices are likely to trade in the range of | 210-225 for this week

Energy Outlook

• Crude oil prices declined 1.13% in the previous week as new doubts emerged about the effectiveness of vaccines against the new Coronavirus variant. Further, prices remained under pressure on the expectations of higher production from US and Opec+ countries

• According to US EIA monthly forecast, output in the largest US shale basin is expected to surge to a record in January

• On the demand side, Opec maintained its forecast that world oil demand will grow by 4.15 million barrels per day in 2022

• According to the Commodity Futures Trading Commission (CFTC) data released on Friday, large speculators reduced their net long positions in WTI crude oil to 347,137 from 367,200 over the previous week, indicating bearish sentiment in the crude oil market

Crude oil Outlook

• MCX Crude oil prices face strong resistance at | 5,650 levels. As long as they sustain below this level they are expected to correct further towards 5,100 levels for this week due to higher supply from Opec and demand concerns over the new Coronavirus variant

Natural gas Outlook

• Natural gas prices are expected to rise towards | 315 levels due to decline in Russia’s pipeline gas exports to Europe. Further, forecasts of cooler weather and higher heating demand in the next two weeks than previously expected may also support the prices

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