Commodity Morning Trading Guide | Globe Capital Market LTD.
21-Feb-2023
Commodity Morning Trading Guide

Bullions counter may remain under pressure as investors refrained from taking big positions ahead of U.S. economic data that could influence the Federal Reserve’s rate-hike strategy. Gold can move in range of 55850-56300 while silver also can move in range of 64500-66000. High interest rates discourage investors from placing money in non-yielding assets such as gold. Minutes of the Fed’s latest policy meeting will be released on Wednesday.

Report Overview

BULLIONS

Bullions counter may remain under pressure as investors refrained from taking big positions ahead of U.S. economic data that could influence the Federal Reserve’s rate-hike strategy. Gold can move in range of 55850-56300 while silver also can move in range of 64500-66000. High interest rates discourage investors from placing money in non-yielding assets such as gold. Minutes of the Fed’s latest policy meeting will be released on Wednesday. Money markets expect the Fed to raise benchmark rates above 5% by May, with a peak in rates seen at 5.3% in July. Gold prices hit their highest since April 2022 early this month, but have since lost about $120 after a slew of economic data showed signs of a resilient U.S. economy and a tight labour market, fuelling concerns that interest rates would stay higher for longer.

BASE METALS

In base metal counter, Copper can trade mixed path in range of 772-785. In China copper stocks in mainstream markets increased 4,500 mt to 329,900 mt compared with Friday February 17. Despite limited arriving shipments of imported copper, downstream consumption has weakened, growing inventories. At present, the total inventory has increased by 133,300 mt compared with 196,600 mt before Chinese New Year holidays. Zinc may trade with sideways path as it can move in range of 267-276. Aluminum can trade weaker path as it can move in range of 210-215. On the supply side, aluminium smelters in Yunnan have begun to reduce production, and the production capacity is expected to be reduced by 670,000-800,000 mt, shoring up aluminium prices. The supply of goods in the spot market is relatively abundant. Aluminium ingot inventory data still showed a slight accumulation.

ENERGY: Crude oil may trade on weaker path as it can move in range of 6300-6450. The Brent crude benchmark opened slightly lower as the U.S. dollar strengthened and traders waited for cues from the U.S. Federal Reserve meeting minutes, after optimism over demand amid tightening supplies drove prices higher on Monday. Traders are awaiting the minutes of the latest Federal Reserve meeting, due on Wednesday, as data on core inflation has raised the risk of interest rates remaining higher for longer. Russia plans to cut oil production by 500,000 barrels per day (bpd), equating to about 5% of its output, in March after the West imposed price caps on Russian oil and oil products. Natural gas prices can tad further lower as it can move in range of 175 while taking resistance near 195.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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