Commodity Morning Trading Guide | Globe Capital Market LTD.
31-May-2024
Commodity Morning Trading Guide

Bullions counter may trade on volatile path as yellow metal was on track for a fourth straight monthly gain, while investors awaited a key U.S. inflation reading that could provide further insights into the Federal Reserve's policy path.

Report Overview

BULLIONS
Bullions counter may trade on volatile path as yellow metal was on track for a fourth straight monthly gain, while investors awaited a key U.S. inflation reading that could provide further insights into the Federal Reserve’s policy path. Overall gold can move in range of 71750-72250 while silver also can move in range of 92000-94000. Fed policymakers continue to expect inflation to fall this year even as the labor market stays strong, leaving them in no hurry to cut the policy rate from the 5.25%-5.5% range they have kept it in since last July. Traders’ bets signalled growing skepticism that the Fed will cut rates more than once in 2024, currently pricing in about a 64% chance of a rate cut by November, according to the CME FedWatch Tool.
BASE METALS
In base metal counter, Copper prices can open in red as it can move range of 865-885. China’s manufacturing activity unexpectedly fell in May, an official factory survey showed on Friday, keeping alive calls for fresh stimulus as a protracted property crisis continues to weigh on businesses, consumers and investors. The official purchasing managers’ index (PMI) fell to 49.5 in May from 50.4 in April, below the 50-mark separating growth from contraction. The International Monetary Fund on Wednesday revised up its China growth forecast by 0.4 percentage points to 5% for 2024 and 4.5% in 2025, but warned the property sector remained a key growth risk. Problems in the property sector have had a negative impact across broad areas of China’s economy and have slowed Beijing’s efforts to shift its growth model more towards domestic consumption from debt-fuelled investment. Aluminium may trade on negative path as it can move in range of 238-246.
ENERGY
Crude oil may trade on subdued path pas it may move in range of 6430-6550. Oil prices fell early on Friday as investors responded to comments from U.S. Fed officials who said it was too soon to start considering rate cuts, and following a surprise build in U.S. gasoline stocks that weighed on the market. Meanwhile, U.S. crude oil inventories fell 4.2 million barrels to 454.7 million barrels in the week ending on May 24, the Energy Information Administration (EIA) said on Thursday. The Organization of the Petroleum Exporting Countries led by Saudi Arabia and allies led by Russia, together known as OPEC+, are currently cutting output by 5.86 million barrels per day, equal to about 5.7% of global demand. Gasoline inventories, however, rose in the U.S. against an expectation that demand would be higher ahead of the long Memorial Day weekend, which signals the start of the summer driving season. Stocks were up 2 million barrels for the week to 228.8 million barrels, the EIA said, compared with expectations for a 400,000-barrel draw. Natural gas can continue its downside momentum as it can move in range of 210-218.


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