Spot gold is likely to face hurdle near $2035 level and slip back towards $2010 level amid strong dollar and rise in US treasury yields - ICICI Direct
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Metal’s Outlook:
Bullion Outlook:
• Spot gold is likely to face hurdle near $2035 level and slip back towards $2010 level amid strong dollar and rise in US treasury yields. Recent batch of economic data from US showed resilience in the economy, diminishing expectations for imminent rate cuts from US Federal Reserve. Moreover, prices may slip on projections of improved economic data from US. Additionally, hawkish chorus from major central bankers dialed back expectations for rate cuts. Meanwhile, demand for safe haven may continue to rise on escalating tension in Middle East
• MCX Gold prices is likely to face hurdle near 62,000 level and slip towards 61,450 levels
• MCX Silver is expected to follow gold and slip back towards 71,000 level as long as it sustains below 72,000 level
Base Metal Outlook
• Copper prices are expected to trade with negative bias amid strong dollar, rise in stockpiles at LME registered warehouses and worries about China’s economic growth. Further, investors fear that higher borrowing cost for longer duration will hurt global economic growth and dent demand for industrial metal. Officials from major central banks pushed back against market expectations of imminent interest rate cuts.
• MCX Copper is expected to slip towards 708 level as long as it stays below 717 level. A move above 717 would reverse the trend and open the doors for 720 levels.
• Aluminum is expected to slip further towards 196 level as long as it stays below 198.50 level.
Energy Outlook:
• NYMEX Crude oil is expected to hold the support near $72 and rise towards $75 level as OPEC and IEA forecasted strong growth in global oil demand. Further, investors fear over escalating tension in Middle East after Pakistan fired a retaliatory strike at Iran and Yemeni Houthi vowed to keep attacking ships in Red Sea. Moreover, in the US, about 40% of oil output in North Dakota's oil output remained shut in due to extreme cold weather and operational challenges. However, sharp upside may be capped on strong dollar, amid growing doubts that US Fed will cut interest rates as soon as March 2024
• MCX Crude oil Feb is likely to rise further towards 6250 levels as long as it trades above 6000 levels.
• MCX Natural gas is expected to slip further towards 218 level as long as it trades below 230 level
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