Bullion counter may trade with bearish bias where Gold may find support near Rs46,800 per 10grams and facing resistance near Rs47,300, while silver may trade with higher volatility where it may find support near Rs68,200 per kilogram and facing resistance near Rs69,500. Gold prices edged higher as weaker-than-expected US jobs data re-ignited concerns over a recovery in the world’s largest economy, pressuring the dollar and boosting bullion’s appeal. Spot gold rose 0.1 per cent to $1,813.99 per ounce. The US gold futures gained 0.2 per cent to $1,816.50. The dollar fell from an over two-month peak on Friday after a US jobs report indicated a slow recovery from the impacts of the Covid-19 pandemic. A weaker dollar makes gold cheaper for holders of other currencies. The employment report on Friday showed job losses in manufacturing and construction, two sectors which have been propping up the economy. The US President Joe Biden and his Democratic allies in Congress forged ahead with their $1.9 trillion Covid-19 relief package on Friday. Capping gold’s gains, yields on the benchmark 10-year Treasury note soared to levels not seen in nearly a year. Higher yields increase the opportunity cost of holding non-yielding bullion. Breakevens on 10-year Treasury Inflation-Protected Securities, which measure average annual inflation expectations for the coming decade, have jumped to 2.19 per cent, the highest level since mid-2018. Speculators reduced their bullish positions in Comex gold and silver contracts in the week to February 2, data showed on Friday. Physical gold demand picked up in China last week ahead of the Lunar New Year festival, while Indian retail buyers cheered a sharp dip in domestic rates. Spot silver gained 1.1 per cent to $27.12 an ounce.
Base metals may trade with bullish bias where Copper can move towards Rs615/kg and taking support near Rs607. Shanghai base metals were mostly higher on Monday morning, holding onto earlier gains, as the US Labor Department reported that the US added 49,000 jobs in January, while the unemployment rate fell to 6.3 per cent, in the first employment report of the Biden administration. Global stocks of copper are at their lowest since 2008 despite the approaching Chinese New Year, when inventories usually build because of lower demand. Total inventories of copper in LME-registered warehouses are at 76,550 tonnes, less than half of October’s levels. The amount of cancelled inventory -- stock earmarked for delivery -- was high at 31 per cent and fuelled concerns over tight LME copper. The People’s Bank of China will keep liquidity reasonably ample, easing money supply worries in the world’s top metals consumer. Zinc may move towards Rs214/kg and taking support near Rs211. Lead can move towards Rs167, while facing resistance near Rs164. Nickel trade with sideways to bullish bias where it may take support near Rs1,312/kg and resistance near Rs1,322. Demand for nickel, mainly used in making stainless steel, is expected to grow rapidly as a raw material in electric vehicle batteries. It is unclear whether New Caledonian supply will be impacted by the coalition collapse. While other countries may ramp up shipments to fill any supply gap from New Caledonia, a tight market in China and recovering demand elsewhere will likely keep Nickel prices well supported. Aluminum may move to Rs165/kg, while taking support near Rs161.
Novelis projects global aluminum demand to remain on a growth trajectory that will not be negatively impacted long-term by the coronavirus pandemic. Novelis shipped 933,000 MT of flat-rolled aluminum products in its fiscal third quarter ending December 31, 2020, climbing 17 per cent year over year.
Crude oil may trade with sideways to bullish bias where support is seen near Rs4,090 per barrel and resistance is seen near Rs4,180/bbl. Oil prices rose on Monday, with Brent futures nearing $60 a barrel, boosted by supply cuts among key producers and hopes for further US economic stimulus measures to boost demand. A weaker dollar against most currencies on Monday also supported commodities. Meanwhile Saudi Arabia’s pledge of extra supply cuts in February and March on the back of reductions by other members of the Organization of the Petroleum Exporting Countries (Opec) and its allies, including Russia, is helping to balance global markets. Still, stronger crude prices are encouraging US producers to increase output, while anti-coronavirus lockdowns across parts of Europe and Asia are keeping a lid on fuel demand. The US oil rig count, an early indicator of future output, rose to its highest since May last week, according to energy services firm Baker Hughes Co Natural gas may trade with higher volatility where resistance is seen near Rs218/mmBtu and support near Rs212.
SMC Global Securities Ltd