Commodity Morning Trading Guide | Globe Capital Market LTD.
04-Jan-2024
Commodity Morning Trading Guide

Bullions counter may trade with weaker path as yellow metal slumps to two-week low after Fed minutes show no dovish tilt, despite acknowledging inflation progress.

Report Overview

BULLIONS

Bullions counter may trade with weaker path as yellow metal slumps to two-week low after Fed minutes show no dovish tilt, despite acknowledging inflation progress. Gold can move in range of 62500-62800 while silver also can move in range of 71800-73000. Gold price slid during the last hour on Wednesday after the US Federal Reserve (Fed) released December’s meeting minutes, which didn’t deliver any dovish hints. The minutes suggest most of the Fed officials see rates are likely or near their peak, though “a number of participants highlighted uncertainty around how long restrictive policy would need to be maintained.” Meanwhile, expectations for rate cuts by the Fed remained unchanged for December 2024, with market players betting the US central bank would slash rates by more than 150 basis points.

BASE METALS

In base metal counter, Copper can move in range of 721-730. Despite the overall decline, copper inventories in Shanghai’s monitored warehouses saw a significant reduction, dropping nearly 90% to 30,905 tons since late February. Similarly, in bonded warehouses in Shanghai, copper stocks fell by 96% to 6,500 tons since mid-March. The drawdown in inventories typically suggests robust demand or supply chain constraints, supporting the market to some extent. However, doubts about demand prospects are evident in the discount for cash copper over the three-month contract, which is trading near 31-year lows. Aluminium may trade in range of 204-208. Concerns about demand were fueled by a sharp decline in the official Chinese manufacturing Purchasing Managers’ Index (PMI), despite improved expansion according to broader Caixin data. Traders should closely monitor developments in the U.S. dollar, Chinese economic indicators, and global demand trends for copper.

ENERGY

Crude oil may witness some lower level buying as may move in range of 6050-6200. Oil prices rose extending the previous day’s sharp gains on concerns about Middle Eastern supply following disruptions at a field in Libya and heightened tension around the Israel-Gaza war. On Wednesday, local protests forced a full shutdown of production at Libya’s Sharara oilfield, which can produce up to 300,000 barrels per day. The field, one of Libya’s largest, has been a frequent target for local and broader political protests. Also on Wednesday, nearly 100 people were killed in blasts at an event to commemorate commander Qassem Soleimani who was killed by a U.S. drone in 2020, as Iranian officials blamed unspecified “terrorists” and vowed revenge. Natural gas prices may witness lower level buying as it may move in range of 220-230.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Disclosure

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