Bullions counter hovered near one-month lows as yellow metal fell to their lowest level in more than five weeks on Monday as the dollar and bond yields strengthened ahead of the U.S. Federal Reserve’s July meeting minutes this week that could guide expectations on future interest rates. Gold can move in range of 58700-59000 while silver also can move in range of 69000-70500.
Bullions counter hovered near one-month lows as yellow metal fell to their lowest level in more than five weeks on Monday as the dollar and bond yields strengthened ahead of the U.S. Federal Reserve’s July meeting minutes this week that could guide expectations on future interest rates. Gold can move in range of 58700-59000 while silver also can move in range of 69000-70500. U.S. bond yields gained, lifting the dollar to its highest since July 7, after data on Friday showed producer prices increased slightly more than expected in July as the cost of services rebounded at the fastest pace in nearly a year. China’s data on retail sales and industrial output are due Tuesday. Markets are also awaiting U.S. retail sales figures on Tuesday, followed by Fed’s July meeting minutes on Wednesday. Reflecting investor interest in gold, SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell to the lowest level since late-January 2020.
In base metal counter, Copper can trade on weaker path as it can move in range of 718-730. Copper prices fell on Friday after data demonstrating the sluggish nature of China’s post-pandemic recovery. Concern over the health of the property sector has also resurfaced, with a possible debt restructuring by Country Garden, China’s top private property developer. China’s new bank loans tumbled in July, data showed on Friday, with annual growth of outstanding total social financing (TSF) – a broad measure of credit and liquidity in the economy – slowing to 8.9%. TSF slumped to 528.2 billion yuan ($73.04 billion) from 4.22 trillion yuan in June, missing analyst estimates. Zinc may remain on sideways path as it can move in range of 212-220. Aluminum can move in range of 195-204.
ENERGY: Crude oil may remain on weak bias as it may move in range of 6800-6900. Oil prices eased on Monday as concerns about China’s faltering economic recovery and a stronger dollar weighed against seven weeks of gains on tightening supply from OPEC+ output cuts. Prices slipped as the U.S. dollar index extended gains after a slightly bigger increase in U.S. producer prices in July lifted Treasury yields despite expectations the Federal Reserve is at the end of hiking interest rates. Oil may be range-bound this week as China’s sluggish economic recovery and a stronger U.S. dollar could depress prices, but OPEC+ has indicated it would do whatever it takes to tighten supply and stabilise markets. Supply cuts by Saudi Arabia and Russia, part of the alliance between the Organization of the Petroleum Exporting Countries and their allies, or OPEC+, are expected to erode oil inventories over the rest of this year. Natural gas prices may tad lower as it may move in range of 225-235.
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