Bullions counter may trade on weaker path as investors await U.S. inflation data that could shape expectations around the Federal Reserve’s interest rate outlook.
DAILY MARKET NEWS AND OUTLOOK
Bullions counter may trade on weaker path as investors await U.S. inflation data that could shape expectations around the Federal Reserve’s interest rate outlook. Yellow metal can move in range of 58400-58700 while silver also can move in range of 71000-72300. The U.S. Consumer Price Index (CPI) data due 6 pm could offer some insights on what to expect from the Fed in terms of rate hikes. The European Central Bank also expects inflation to remain above 3% next year, bolstering the case for a tenth consecutive interest rate hike on Thursday. Bullion is highly sensitive to rising interest rates as they increase the opportunity cost of holding non-yielding bullion.
In base metal counter, Copper can move on upside path as it can move in range of 725-740. Copper stocks in LME-registered warehouses saw a rise of 1,125 tons, reaching a total of 135,650 tons, marking the highest levels since last October. On-warrant inventories also climbed to 135,350 tons. China’s property market offered support to copper, with developer Country Garden gaining approval from creditors to extend bond repayments. China’s copper cathode output in August exceeded expectations, increasing by 6.8% month-on-month and 15.5% year-on-year, contributing to overall growth of 11.52% year-on-year from January to August. Zinc may remain on upside path as it can move in range of 217-224. Aluminum can move in range of 198-204.
Crude oil may continue its rally as expectations of tighter global supply and fears of supply disruption in Libya outweighed concerns of slower demand in some countries such as China. Overall it can move in range of 7300-7470. The news of OPEC member Libya shutting four of its eastern oil export terminals due to a deadly storm also lent support to oil prices. The Organization of the Petroleum Exporting Countries (OPEC) stuck to its forecasts for robust growth in global oil demand in 2023 and 2024, citing signs that major economies are faring better than expected despite headwinds such as high interest rates and elevated inflation. Keeping supplies tight, Saudi Arabia and Russia last week extended voluntary supply cuts of a combined 1.3 million bpd to year end. OPEC, Russia and allied producers are known as OPEC+. The EIA, meanwhile, said global oil inventories were expected to decline by almost a half million bpd in the second half of 2023, causing oil prices to rise with Brent averaging $93 per barrel in the fourth quarter. Natural gas prices may remain on upside path as it can move in range of 223-235.
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