Base metals may trade sideways
Investors watching out for data that could shape the US Fed’s interest rate trajectory
Hyderabad: Copper future contracts were on MCX trading at Rs729.30/kg as against its four-month high of Rs744 on December 27, 2023, low of Rs707.40 on October 15, 2023.
“Base metals may trade sideways to bearish bias, whereas copper may trade in the range of Rs719-725/kg. Copper and other industrial metals are trading flat on Wednesday on hopes that top metals consumer China would unleash more stimulus to boost its economy, while the Dollar index hovered near a six-week high which weighing on counter,” Ravinder Kumar, senior research analyst (commodities) at SMC Global Securities Ltd, told Bizz Buzz.
China’s Cabinet recently pledged more fund injections in the capital market to stabilise market confidence. One option included mobilising about 2 trillion yuan to stabilise the slumping stock market, according to the media reports.
“However, the metal’s price rally is unlikely to be sustained amid the absence of a stimulus package that directly pumps up metals consumption. Zinc may post selling where it may take support near Rs223 and face resistance near Rs226. Lead may move with a mixed trend and trade in the range of Rs181-183. Aluminium may trade with sideways bias, taking support near Rs202 and resistance near Rs205,” observes Kumar.
Bullion
According to SMC Global Securities Ltd, gold may trade in the range of Rs61,800-62,100/10gm, and Silver also trades in the range of Rs70,700-71,400/kg, with sideways to a bearish bias. Gold prices were steady on Wednesday (Jan 24) as investors awaited US economic data that could offer more clues on the Federal Reserve’s depth and scale of interest rate cuts. Investors will be watching out for data that could shape the US Fed’s interest rate trajectory - starting with flash PMI report due later in the day, fourth-quarter advance GDP estimates on Thursday and personal consumption expenditures data on Friday. Investors will also be watching out for European Central Bank (ECB) chief Christine Lagarde’s press conference on Thursday for clues on where rates are headed. Fed officials last week said the US central bank needs more inflation data in hand before any rate cut judgment could be made and that the baseline for cuts to start was in the third quarter. Japan’s exports value surged to their biggest monthly record in December, official data showed, propelled by shipments to China rising for the first time in over a year and record sales to the US.
Energy
Energy counter may witness bullish movement, where crude oil may trade in the range of Rs6,140-6,220 per barrel. Oil prices were little changed in Asian trading on Wednesday.
“Weak demand and a recovery in supply limited the market’s reaction to mounting geopolitical risk. Libya had restarted oil exports and US supply had started to recover from a recent cold snap limited price rises,” remarked Kumar.
Libya’s 300,000 bpd Sharara oilfield restarted on January 21 after a protest-related pause since early January. In the US, the third-largest oil-producing state of North Dakota brought some oil output back online after weather-related disruption, the state’s pipeline authority said. But output was still down as much as 300,000 barrels per day (bpd). In mid-January, output had weakened by as much as 425,000 bpd on extreme cold. Natural gas prices may trade in the range of Rs195-202 per 1 mmBtu. A mild temperature outlook stretching into early February continued to put pressure on natural gas futures.
