BULLIONS

Bullions counter may trade weaker path as yellow metal traded in a narrow range on Tuesday, hovering close to a recent two-month low, as optimism over a U.S. debt ceiling deal and reduced bets for a pause in the Federal Reserve’s rate hike policy in June dented the metal’s appeal. Gold can move in range of 5900-59600 while silver also can move in range of 70000-72000. U.S. President Joe Biden said on Monday he feels good about prospects for passage by Congress of the debt ceiling deal that he reached with House of Representatives Speaker Kevin McCarthy. Fed officials on the other hand have in recent days turned up the heat with a hawkish outlook on interest rates, and that has to some extent also offset safe-haven flows around the U.S. debt ceiling situation as higher interest rates dull the appeal for zero-yield bullion.

BASE METALS

In base metal counter, Copper can witness lower level buying as it can move in range of 700-720. On the macro front, the U.S. debt ceiling agreement boosted risk appetite in global markets and weakened the safe-haven appeal of the dollar, which fell on Monday. However, the core inflation in the United States is at a high level, and the market expects the Fed to raise interest rates in June. The arrivals of both imported copper and domestic copper in south China increased, and consumption has declined after the copper price rebounded. In terms of consumption, demand decreased towards the end of the month, and the rebound in copper prices also caused consumption to fall. Zinc may remain on subdued path as it can move in range of 207-214. Aluminum can trade on weaker path as it can move in range of 204-208.

ENERGY: Crude oil may trade on upside path as it can move in range of 5950-6100. Oil prices rose on Tuesday as the expectations the debt ceiling deal in U.S., the world’s biggest oil user, will spur more demand but fears of further interest rate rises and that OPEC+ will leave output quotas unchanged capped gains. While the debt ceiling deal has spurred buying in riskier assets such as commodities, major oil producers will meet on June 4 and it is unclear whether they might increase their output cuts amid an overall slump in prices since the middle of April. Additionally, expectations are for U.S. interest rates to rise further, potentially crimping economic growth and therefore oil demand. Natural gas prices may witness short covering as it can move in range of 192-205.

Disclosure

Globe Capital Market Limited (“GCML”) is a Stock Broker registered with BSE, NSE, USE and MSEI in all the major segments viz. Capital, F & O and CDS segments. GCML is also a Depository Participant and registered with both the Depositories viz. CDSL and NSDL. Further, GCML is a SEBI registered Portfolio Manager. GCML includes subsidiaries, group and associate companies, promoters, directors, employees and affiliates.

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