Bullions counter can trade in narrow range as investor awaits the key U.S. inflation data due tomorrow. Gold can move in range of 55600-55900 while Silver also can move in range of 68000-69000.
Bullions counter can trade in narrow range as investor awaits the key U.S. inflation data due tomorrow. Gold can move in range of 55600-55900 while Silver also can move in range of 68000-69000. Federal Reserve Governor Michelle Bowman said on Tuesday that the U.S. central bank will have to raise rates further to combat high inflation and that will likely lead to softer job market conditions. Gold is considered an inflation hedge but is highly sensitive to rising interest rates, which increases the opportunity cost of holding the non-yielding bullion. The central bank sector has been one of the highlights of the gold market in 2022, having bought a net 673t between Q1 and Q3.
In base metal counter, Copper can remain on higher side as it can move in range of 750-765. The big focus this week is on U.S. inflation data, due on Thursday. If inflation comes in below expectations that would drive the dollar down and support metals prices. On the macro front, the US December ISM non-manufacturing PMI fell below the 50-point mark, which is far lower than expected. In terms of fundamentals, as more downstream companies take their Chinese New Year holidays and the copper prices have remained high recently, the downstream producers halted their purchases for fear of a further price hike. Zinc may move on firm path as it can move in range of 275-285. Aluminum can trade sideways in range of 207-215.
ENERGY: Crude oil may trade on weaker path as it can move in range of 6000-6250 in MCX. Oil prices fell on Wednesday, erasing the previous session’s gains, after industry data showed an unexpected build in crude and fuel inventories in the United States, the world’s biggest oil user, which reignited worries about fuel demand. U.S. crude stocks jumped by 14.9 million barrels in the week ended Jan. 6, sources said, citing data from the American Petroleum Institute (API). At the same time, distillate stocks, which include heating oil and jet fuel, rose by about 1.1 million barrels. The oil market has been pulled lower by worries about U.S. interest rate hikes to curb inflation which would trigger a recession and curtail fuel demand, offsetting hopes for fuel demand growth in China, the world’s second largest oil consumer, as it eases COVID-19 curbs and resumes international travel. Natural gas prices can trade on volatile path as it can move in range of 290-320.
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