Capitalstars Market Update
Daily Metal and Energy Outlook 01st April
Bullions: Bullion counter may trade sideways to negative path. Gold prices inched down on Monday as investor appetite for riskier assets improved on signs of progress in Sino-U.S. trade negotiations and better-than-expected Chinese economic data. Asian stocks rose as signs of progress in U.S.-China trade talks and firmer Wall Street shares supported sentiment, although another defeat for British Prime Minister Theresa May’s proposed Brexit deal added to the pound’s recent woes. Gold can dip further lower and can test 31800 while facing resistance near 32100. Silver can also dip lower as it can test 37500 while facing resistance near 37900. U.S. President Donald Trump said on Friday that trade talks with China were going very well, but cautioned that he would not accept anything less than a “great deal” after top U.S. and Chinese trade officials wrapped up two days of negotiations in Beijing. Gold premiums in China eased last week as worries about a slowdown in the world’s top bullion consumer prompted some customers to hold off on purchases, while a price dip buoyed appetite in other Asian hubs. Hedge funds and money managers increased their bullish wagers in COMEX gold in the week to March 26, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.
Base metals: Base metals prices may trade sideways to positive path. China’s manufacturing sector unexpectedly returned to growth for the first time in four months in March, in a sign that government stimulus measures may be slowly gaining traction, a private business survey showed on Monday. The Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) expanded at the strongest pace in eight months in March, rising to 50.8 from 49.9 in February, above the neutral 50-mark dividing expansion from contraction on a monthly basis and the highest level seen since July 2018. Copper may recover towards 455 while taking support near 440 in MCX. Protests at Las Bambas in Peru, one of the country’s largest copper producers, showed no sign of abating days after the mine operator MMG warned it could declare force majeure on contracts. Chilean state miner Codelco produced slightly less copper in 2018 than the year before, the company reported on Friday, as it continued to contend with declining ore grades and rising costs at its aging mines. Zinc (Apr) can test 224 while taking support near 219. Lead can move in range of 139-141. Nickel may recover towards 925 while taking support near 895. Aluminum prices may trade in range of 148-151.
Energy: Crude oil may trade on positive note as oil prices rose on Monday, adding to gains in the first quarter when the major benchmarks posted their biggest increases in nearly a decade, as concerns about supplies outweigh fears of a slowing global economy. U.S. sanctions on Iran and Venezuela along with supply cuts by members of the Organization of the Petroleum Exporting Countries (OPEC) and other major producers have helped support prices this year, overshadowing concerns about global growth and the U.S.-China trade war. Crude oil may recover towards 4250 while taking support near 4150 in MCX. The U.S. has also instructed oil trading houses and refiners to further cut dealings with Venezuela or face sanctions themselves, even if the trades are not prohibited by published U.S. sanctions, three sources familiar with the matter said. A deal between OPEC and allies such as Russia to cut output by around 1.2 million barrels per day, which officially started in January, has also supported prices. Natural gas may witness lower level buying as it can test 192 while taking support near 185 in MCX. U.S. natural gas futures fell to a five-week low on Friday on forecasts for warmer weather and less heating demand than previously expected in the next two weeks.
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