BULLION - MCX Gold and Silver may note some gains tracking cues from international exchange. COMEX gold trades higher near $1348/oz and has tested the highest level since April 2018. Gold has benefitted from general correction in US dollar index as market players position for FOMC minutes and US-China trade talks. FOMC minutes due today will reflect on Fed�s stance on rate hikes as well as bond reduction plan. Disappointing US economic data and global economic challenges indicate that Fed may maintain patient rate hike stance. Meanwhile, minutes may show that there were discussions on ending bond reduction plan. US-China negotiations resume Tuesday and are scheduled to continue through Friday. Meanwhile, he US is asking China to keep its currency stable as part of the negotiations. It is likely that we may not see a major breakthrough this week amid possibility of US extending the March 1 deadline and amid possibility of a meeting between US and Chinese President. Gold and other precious metals have also benefitted from rally in palladium price which has hit record high level today on supply tightness concerns. ETF outflows however show weaker investor interest in gold at higher price. Gold holdings with SPDR ETF fell by 0.58 ton to 792.446 tonnes. Gold has rallied sharply after breaking past the $1330/oz level and the rally will sustain only if we see further signs of dovish tilt in Fed�s monetary policy stance.
ENERGY- Crude Oil- MCX Crude may note choppy trade tracking cues from international exchange but overall bias is still on the upside. NYMEX crude trades in a narrow range above $56 per barrel holding on to recent gains. Supporting crude price is supply disruption at Saudi�s Safaniyah oilfield and Saudi Arabia�s pledge to deepen production cuts as part of OPEC-non OPEC production cut deal. Meanwhile, reports noted that Russian President Vladimir Putin and Saudi King Salman Bin Abdulaziz agreed to extend their joint cooperation on the global oil market. This will ease market concerns that Russia�s hesitance on continuing with production cuts. However, weighing on crude price is higher US output. As per US EIA latest drilling report, crude production from shale resources is expected to rise by another 1% in March. Also weighing on price is expectations of another increase in US crude oil stocks. Amid other factors, crude remains in a range as market players focus on US-China trade talks. US-China negotiations resume Tuesday and are scheduled to continue through Friday. As per reports, the US is asking China to keep its currency stable as part of the negotiations. Weakness in US dollar ahead of FOMC minutes has also lent some support to commodities at large. Crude may witness choppy trade amid positioning near contract expiry but buying on dips is recommended as supply concerns persist and US-China trade talks continue to progress.
Natural Gas- MCX Natural gas may note mixed trade in line with international market but selling could be considered at higher levels. NYMEX natural gas trades marginally lower near $2.65/mmBtu after a 1.4% gain in previous session. Forecast of cold weather in some parts of US and expectations of a bigger than average decline in gas stocks has lent some support to price. The sharp rise in crude oil price has also lent some support to gas price. However, weighing on price is nearing end of high demand winter season and higher US output. Mixed factors may keep gas in a range however selling could be considered at higher levels as ending winter season may keep a check on demand expectations.
BASE METAL - Base metals on LME trade sideways to higher today after most metal ended in green yesterday. LME Nickel was the best performer with 1.65% gains followed by 0.7% rise in Copper and Zinc prices. In other metals however Aluminium ended unchanged while Lead closed 0.4% lower.
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