Bullions counter may trade on mixed path as investors awaited U.S. inflation figures tomorrow that could provide an updated view on interest rates.
DAILY MARKET NEWS AND OUTLOOK
Bullions counter may trade on mixed path as investors awaited U.S. inflation figures tomorrow that could provide an updated view on interest rates after the Federal Reserve kept the door open for further policy tightening. Yellow metal can move in range of 58800-59200 while silver also can move in range of 71000-72500. Market activity is likely to be broadly subdued until the U.S. Consumer Price Index (CPI) data is out on Wednesday, which could provide guidance on U.S. interest rates after a widely expected pause by the Fed next week. Markets are pricing in a 93% chance of the Fed holding rates steady at their Sept. 19-20 policy meeting, but there’s a 41% chance of a hike in November, according to CME’s FedWatch tool.
In base metal counter, Copper can move on upside path as it can move in range of 725-740. On the macro front, a survey by the New York Fed showed that U.S. consumers’ inflation expectations were basically stable in August, but households were more worried about their financial situation and more pessimistic about the job market. Inventories in east China and south China were significantly lower last weekend due to less arrivals and increased downstream replenishment. In terms of consumption, due to the large price difference between the SHFE front-month and SHFE next-month copper contracts, downstream purchasing was weak even as spot quotes were low. Zinc may remain on upside path as it can move in range of 220-226. Aluminum can move in range of 198-204.
Crude oil may witness some lower level buying as it can move in range of 7200-7350. The benchmark oil price settled largely unchanged yesterday, holding above the $90 a barrel reached last week for the first time in 10 months following fresh Saudi and Russian crude output cuts. The supply cuts overshadowed continuing concern over Chinese economic activity. On Monday U.S. Deputy Treasury Secretary Wally Adeyemo said that China’s economic problems were more likely to have a local impact than affect the United States. Crude supply could also see fresh disruption from powerful storms and floods in eastern Libya, in which more than 2,000 people have died and which has forced the closure of four major oil export ports since Saturday – Ras Lanuf, Zueitina, Brega and Es Sidra. The IEA last month lowered its 2024 forecast for oil demand growth to 1 million bpd, citing lacklustre macroeconomic conditions. OPEC’s August report, meanwhile, kept its 2.25 million bpd demand growth forecast unchanged. Natural gas prices may remain on upside path as it can move in range of 210-225.
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