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

Bullions counter may trade on firm path as yellow metal prices were flat in early Asian trading on Tuesday after a sharp gain in the previous session, as investors strapped in for U.S. economic data due later in the week that could offer more clues to the Federal Reserve's interest rate path.

Report Overview

BULLIONS
Bullions counter may trade on firm path as yellow metal prices were flat in early Asian trading on Tuesday after a sharp gain in the previous session, as investors strapped in for U.S. economic data due later in the week that could offer more clues to the Federal Reserve’s interest rate path. Overall gold can move in range of 71800-72500 while silver also can move in range of 91000-93000. Investors await the ADP employment report on Wednesday and non-farm payrolls data on Friday to gauge the U.S. economy’s health and if it will deter the Fed from cutting rates in September. Traders are currently pricing in about a 60% chance of a Fed rate cut in September, according to CME FedWatch tool. The Federal Reserve Bank of New York said that underlying inflation pressures eased slightly in April.
BASE METALS
In base metal counter, Copper prices can open in green as it can move range of 870-890. On the macro front, the US May ISM Manufacturing PMI fell to 48.7, marking the second consecutive month of decline. Meanwhile, the Federal Reserve Bank of Atlanta lowered US Q2 GDP growth forecast, increasing the likelihood of a US Fed rate cut later. In China, the May Caixin Manufacturing PMI rose to 51.7, the highest since July 2022, indicating an accelerated expansion in manufacturing production and operation. Copper prices were lifted by the expectations of a Fed rate cut and domestic manufacturing data. On the fundamentals, supply continued to increase, and downstream purchase appetites significantly rebounded after copper prices fell, with strong sentiment for dip buying. Aluminium may trade on negative path as it can move in range of 240-247.

ENERGY
Crude oil may trade on negative path as it may move in range of 6100-6200. Oil prices eased in early trade on Tuesday, extending their losses from the previous session when prices fell to their lowest in four months, as investors worried about supply ticking up later in the year. The Organization of the Petroleum Exporting Countries and allies led by Russia, together known as OPEC+, on Sunday agreed to extend most of their oil output cuts into 2025 but left room for voluntary cuts from eight members to be gradually unwound from October onward. Signs of weakening demand growth have also weighed on oil prices in recent months, with data on U.S. fuel consumption in focus. The U.S. government will release inventory and product supplied data on Wednesday. Product supplied, considered a proxy for demand, will show how much gasoline was consumed around the Memorial Day weekend, the start to the U.S. driving season. Natural gas can open in green as it can move in range of 220-235.

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