Commodity Morning Trading Guide | Globe Capital
16-Dec-2022
Commodity Morning Trading Guide

Bullions counter can trade with weaker bias as U.S. Federal Reserve projected higher interest rates for a longer period which prompted short covering in dollar index. Gold (Feb) can dip lower towards 53800 while taking resistance near 54300. Silver (Mar) can move lower towards 66800 while taking resistance near 68200.  

Report Overview

BULLIONS

Bullions counter can trade with weaker bias as U.S. Federal Reserve projected higher interest rates for a longer period which prompted short covering in dollar index. Gold (Feb) can dip lower towards 53800 while taking resistance near 54300. Silver (Mar) can move lower towards 66800 while taking resistance near 68200. The Fed on Wednesday raised interest rates by 50 basis points as expected, but Chair Jerome Powell said the central bank would deliver more hikes next year even as the economy slips towards a recession. Central banks in Europe followed the Fed in slowing the pace of interest rate increases but offered a similar stark message that financial conditions will continue to tighten even as economic performance deteriorates.

BASE METALS

In base metal counter, concerns about the risk of economic recession caused by the US Fed’s rate hikes next year aroused risk aversion sentiment in the market.  Copper can move on sideways path as it can move in range of 697-711. In terms of fundamentals, the inventory in Guangdong has dropped for ten consecutive days, and the arrivals in Guangdong were low as smelters are still under maintenance. Recently, the inventory has approached a low level in the year. Zinc may move on mixed path as it can move in range of 277-286. Aluminum can move lower in range of 204-214.  China is striving to expand domestic demand, but consumption turned sluggish as the number of people infected with COVID surged. On the supply side, smelters in Guizhou may face production cuts of nearly 30%.

ENERGY: Crude oil may trade on sideways path as it can move in range of 6200- 6400. The market found support this week from International Energy Agency projections of Chinese oil demand recovering next year after a 2022 contraction to 400,000 barrels per day (bpd). The agency raised its 2023 oil demand growth estimate to 1.7 million bpd. OPEC on Tuesday stuck to its forecasts for global oil demand growth of 2.55 million bpd this year and 2.25 million bpd in 2023 after several downgrades, saying that while economic slowdown was “quite evident” there was potential upside such as from a relaxation of China’s zero-COVID policy. Natural gas prices can witness some recovery as it can test 580 while taking support near 540.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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