Commodity Morning Trading Guide | Globe Capital
22-Sep-2022
Commodity Morning Trading Guide

Bullion counter can trade on weaker path on stronger greenback as hawkish comments by Federal Reserve as it increased interest rates by another 75 basis points and signalled that borrowing costs would keep rising this year. But Russia and Ukraine tensions can cap the downside. Gold (Oct) can dip lower 49200 while taking resistance near 49600 while Silver (Dec) can slip towards 57000 while taking resistance near 58000.

Report Overview

BULLIONS

Bullion counter can trade in range as investors will keep close eye on the outcome of FOMC meeting later today in which U.S central bank is expected to hike rates aggressively in an effort to curb inflation.  Gold (Oct) can move in range of 49000-49500 while Silver (Dec) can move in range of 56500-57500. The Fed’s two-day policy meet will conclude on Wednesday, with rate futures traders pricing in an 81% chance of a 75 basis-point hike and a 19% probability of a 100 bps increase. The European Central Bank may need to raise interest rates to a level that restricts economic growth in order to cool demand and combat unacceptably high inflation, ECB President Christine Lagarde said on Tuesday. Holdings of SPDR Gold Trust , the world’s largest gold-backed exchange-traded fund, fell 0.48% to 953.32 tonnes on Tuesday from 957.95 tonnes on Monday.

BASE METALS

In base metal counter, Copper can open in green as it can move towards 660. On the fundamentals, as of September 20, LME copper inventory has been rising for two days in a row, and the proportion of cancelled warrants fell to 11.41%.China saw the inflow of imported copper cathode that was delayed by the typhoon, easing the spot supply tightness. However, the shortage of copper scarp and blister copper still restricted the smelting activities. Zinc may move sideways in range of 270-286 in MCX. Aluminum can dip lower towards 192. On the supply side, the news of estimated production cuts in Yunnan province was still fermenting, and a number of smelters have already cut the production by 10%.

ENERGY

Crude oil may continue on sideways path as investors braced for another aggressive interest rate hike from the U.S. Federal Reserve and that could impact the fuel demand as it can move in range of 6700-6850. Meanwhile, U.S. crude and fuel stocks rose by about 1 million barrels for the week ended Sept. 16. According to market sources citing American Petroleum Institute figures on Tuesday. Gasoline inventories rose by about 3.2 million barrels, while distillate stocks rose by about 1.5 million barrels. On the supply side, the OPEC+ producer grouping – the Organization of the Petroleum Exporting Countries and associates including Russia – is now falling a record 3.58 million barrels per day short of its targets, or about 3.5% of global demand. Natural gas prices may witness lower level buying as it can move in range of 615-640.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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