Commodity Morning Trading Guide | Globe Capital Market LTD.
Commodity Morning Trading Guide

Bullions counter may tad lower as hints of further interest rate hikes by the U.S. Federal Reserve bolstered the dollar. Gold can move in range of 58500-59200 while silver also can move in range of 70500-72000.

Report Overview


Bullions counter may tad lower as hints of further interest rate hikes by the U.S. Federal Reserve bolstered the dollar. Gold can move in range of 58500-59200 while silver also can move in range of 70500-72000. The Fed, in new economic projections, signalled that a stronger-than-expected economy and a slower decline in inflation will result in a likely rise in borrowing costs by another half-a-percentage point by the end of this year. Traders are now pricing in a roughly 69% chance of Fed rate hike in July, according to the CME Fedwatch tool. Focus also remains on the European Central Bank meeting, where it is expected to raise borrowing costs to their highest level in 22 years on Thursday and leave the door open to more hikes, extending its fight against high inflation even as the euro zone economy flags.


In base metal counter, Copper can trade on lower path as it can move in range of 720-730. On the macro front, the Federal Reserve kept interest rates unchanged as expected, but hinted that borrowing costs would rise another 50 basis points by the end of December. The US dollar index rebounded after falling. In terms of fundamentals, since the Federal Reserve announced the CPI data, copper prices have jumped higher. Zinc may remain on subdued path as it can move in range of 216-224. Aluminum can trade sideways in range of 202-206. The operating aluminium capacity in China will continue to grow in June, sparking fears of oversupply in the third quarter. Some aluminium capacity in Yunnan may be resumed in late June as hydropower supply has picked up, but the nearly 2 million mt of idled capacity in the province is unlikely to be fully restarted in the short term.

ENERGY: Crude oil may remain on volatile path in range of 5500-5650. Oil prices edged higher on Thursday, recovering some ground from the previous day’s plunge on worries about future U.S. interest rate hikes, with markets now looking to key Chinese economic data for demand indications. Attention on Thursday turned to China, the world’s top oil importer, set to announce key May economic data, including retail sales and industrial production. Investors are looking for signs of improvement in the country’s patchy economic recovery or further stimulus from Beijing. In another bearish sign on oil demand, U.S. crude oil stocks rose by about 8 million barrels in the week ended June 9, according to data from the Energy Information Administration. Analysts had estimated a 500,000-barrel decline. Natural gas prices may trade with upside bias as it can move in range of 186-198.


































































































































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