Precious Metals Preview:
Gold continued to stay slippery after hitting a one week high and saw a substantial correction in the US trades, falling around 1% to approach $1820 per ounce mark. US stocks hit another record high and the Dollar index stabilized around one week low, capping major buying in the yellow metal. The real onslaught on the commodity was triggered by another spurt in Bitcoin as the leading digital currency rallied to another all-time high above $48000 mark. MCX Gold futures also lost around 1% to close at Rs 47545 per 10 grams as a drop under Rs 48K extended.
Crude oil futures continued to turn lower after hitting 13 month highs and pared more than 1% to break under $58 per barrel mark in the US trades. MCX Copper also ended down 0.89% at Rs 4247 per barrel. The International Energy Agency or IEA stated in a latest monthly update that World oil demand is set to grow by 5.4 mb/d in 2021 to reach 96.4 mb/d, recovering around 60% of the volume lost to the pandemic in 2020. While oil demand is expected to fall by 1 mb/d in 1Q21 from already low 4Q20 levels, a more favourable economic outlook underpins stronger demand in the second half of the year.
Global oil supply rose 590 kb/d in January, to 93.6 mb/d, as OPEC+ cuts eased and non-OPEC+ pumped more. In February, global output is set to fall as Saudi Arabia implements a sizeable voluntary cut. The outlook is improving for countries outside the OPEC+ alliance, with an 830 kb/d gain expected in 2021 versus a 2020 loss of 1.3 mb/d.
Base Metals Preview:
Copper futures stayed supported in last session as global equities saw steady moves in. COMEX Copper consolidated just under its seven year high and currently trade down 0.39% at $3.76 per pound. MCX Copper closed almost unchanged at Rs 637.70 per kg after testing near Rs 633 per kg mark in intraday moves. The local Copper futures saw considerable selling pressure as the Indian Rupee hit around a one year high of 72.65 per US dollar.
On the economic front, the US Labor Department said initial jobless claims edged down to 793,000, a decrease of 19,000 from the previous week’s revised level of 812,000. However, the near-term outlook for the euro area looks weaker, the European Commission said in its interim Winter forecast, released Thursday. The currency bloc is forecast to grow 3.8% this year, instead of 4.2% projected previously. Meanwhile, the outlook for 2022 was raised to 3.8% from 3%.