Commodity market outlook for August 01, 2018

Bullions View

In the previous session, we saw that prices remained under pressure but failed to give the close below their psychological support levels. 

Gold prices managed to give a close above its lower band support level of 29,770. At the same time, silver managed to hold its support of 38,000 levels. 

Going forward, we could see a volatile trading session as crucial US data is expected in the evening. Hence, bullions should be traded cautiously with strict stop loss.

Energy View

In yesterday’s session, we saw weak trade in crude oil where prices didn’t hold up above its resistance level of 4,830. 

They drifted lower below its uptrend line support level of 4,750. Also, the momentum indicator, RSI fell below the 40 mark on hourly charts adding bearishness to the prices. 

However, today oil inventories would further guide on the upcoming prices movements. Meanwhile, as per yesterday’s move, outlook will remain bearish.

Base Metals View

We saw some positive movements in zinc, lead and copper, while aluminum remained in a range and nickel traded sideways to positive. 

Initially, prices traded negatively but later they recovered. The chart structure for zinc and copper looks positive, but aluminum can be bought above the 143 mark.

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Gold prices rebound to one-week high amid trade tensions

Gold prices rose to a one-week high early on Wednesday, rebounding from a seven-month low touched in the previous session, as the dollar weakened against the yen and an end-of-week deadline loomed for US tariffs on Chinese imports. 

Spot gold was up 0.4 per cent at $1,257.51 an ounce as of 0058 GMT. It touched a one-week high of $1,257.63 earlier in the session. The metal fell to $1,237.32, its lowest since Dec. 12, in the previous session. 

US gold futures were 0.4 per cent higher at $1,258.70 an ounce. 

The dollar was down 0.2 per cent against the yen at 110.3 

China is putting pressure on the European Union to issue a strong joint statement against President Donald Trump's trade policies at a summit later this month but is facing resistance, European officials said. 

US Secretary of State Mike Pompeo will visit Mexico on July 13 to meet President-elect Andres Manuel Lopez Obrador and discuss immigration, trade, security and development, the US and Mexican governments said on Tuesday. 

The Bank of Japan is likely to cut its price growth forecasts at a policy meeting later this month as long-term inflation expectations stall, sources said, highlighting the bank's difficulty in hitting its elusive price target. 

Holdings of SPDR Gold Trust , the world's largest gold-backed exchange-traded fund fell 0.73 per cent to 803.42 tonnes on Tuesday. 

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Gold gains as Italy crisis drives safe-haven buying

Gold prices rose in early Asian trade on Wednesday as political turmoil in Italy and concerns over Sino- trade conflict spurred safe-haven demand. 

FUNDAMENTALS 

Spot gold had risen 0.3 per cent to $1,301.98 per ounce by 0125 GMT. 

Gold futures for June delivery were up 0.2 per cent at $1,301.50 per ounce. 

Italy may hold repeat elections as early as July after the man asked to be prime minister failed to secure support from major political parties for even a stop-gap government, sources said on Tuesday, as markets tumbled on the growing political turmoil. 

The United States said on Tuesday that it still holds the threat of imposing tariffs on $50 billion of imports from China and will use it unless Beijing addresses the issue of theft of American intellectual property. 

Asian shares looked set for a sharpNSE 0.00 % fall on Wednesday as Italy's political crisis provoked a sell-off on Wall Street, sent the euro to a 10-month low and spiked borrowing costs for the government in Rome. 

Benchmark 10-year Treasury yields posted their largest one-day drop on Tuesday since Britain voted to exit the European Union nearly two years ago. 

The Federal Reserve will have difficulty raising interest rates significantly beyond the settings of its Japanese and European counterparts, which are still pursuing accommodative policy, St. Louis Fed President James Bullard said on Tuesday. 

Interest rates futures rallied on Tuesday as traders slashed their expectations that the Federal Reserve would raise key overnight borrowing costs three more times in 2018 as Italy's political situation threatens European economic growth. 

A top North Korean official was headed to New York on Tuesday for talks with Secretary of State Mike Pompeo. 

Holdings of SPDR Gold Trust , the world's largest gold-backed exchange-traded fund, rose 0.35 per cent to 851.45 tonnes on Tuesday. 

Shandong Gold Group Co Ltd , China's largest gold producer, is hunting for gold around the world and is "looking forward to investing in Peru", the chairman of the company said during a presentation Tuesday. 

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