Gold prices slipped to their lowest mark in four weeks as investors looked ahead to a busy week of Federal Reserve speakers for more clues on future monetary policy moves. This has added pressure to the bullions, which did not have positive sessions last week. Gold prices lost roughly 1.2%, last week, the second weekly decline in a row, after the Fed raised interest rates and kept the door open for another hike in 2017. Also on the Comex, silver futures were down around 0.3% after hitting its lowest since May 19 at $16.58.
New York Fed Chief William Dudley and Chicago Fed President Charles Evans are among the Fed speakers this week. On Tuesday, Fed Vice Chair Stanley Fischer, Boston Fed President Eric Rosengren and Dallas Fed President Rob Kaplan are scheduled to deliver comments. Fed Governor Jay Powell is due to speak before the Senate Banking Committee on Thursday.
Last week, the Fed raised interest rates as widely expected and maintained plans to go ahead with another rate hike by year-end. The central bank also provided greater detail about how it plans to reduce its massive $4.5 trillion balance sheet. Despite the Fed’s relatively hawkish message, market players remained doubtful over the central bank’s ability to raise rates as much as it would like before the end of the year due to a recent run of disappointing US economic data.
Among base metals, copper futures edged higher on MCX as participants widened their bets, taking positive cues from the spot market on pick-up in demand. Nickel futures edged higher on MCX as participants enlarged their holdings amid rising demand from alloy-makers and other consuming industries in the spot market.
Crude oil prices were under pressure and came close to the lowest in around seven weeks over concerns of a steady increase in US production. Energy services company Baker Hughes said that US drillers last week added rigs for the 22nd week in a row, the longest such streak on record, implying that further gains in domestic production are ahead.
However, there were some positive comments from Saudi Energy Minister Khalid Al-Falih, who said that the oil market is expected to balance in the fourth quarter even as output from fellow OPEC members Libya and Nigeria as well as from shale oil producers is on the rise.
In agriculture news, Indian spices and spice products surged to a record export growth worth Rs 17,664.61 crore and a volume of 9,47,790 tonnes in 2016-17, sustaining their robust demand in international markets in face of stiff competition. Meanwhile, turmeric futures edged higher on NCDEX on improving demand from upcountry buyers at the spot market. Moreover, reports of good rains in turmeric growing areas too fuelled the uptrend.
Bullions moved lower in previous session indicating a continuation of its prior down trend. On daily charts, Gold had broken the low of hammer formed on June 13, which suggests bearishness in prices. For silver, we have mentioned 38,650 was the crucial level to watch out, prices had broken the mentioned level and is now all set to test 38,000 levels. The momentum indicator, RSI has remained below 40 levels indicating lack of momentum in prices. In today’s trade we expect prices to remain under pressure. However Pullback cannot be ruled out.
Crude oil prices remained silent in previous session as well. However, Outlook remains bearish as long as 2,920 is capped on higher side above which bias would change to positive for an upside target of 2,980 levels. Natural gas prices drifted lower later in yesterday’s session. We continue to say that breach of 200 on the higher side would change the bias to positive.
Metals prices remained flat to positive in previous session. Lead has broken its resistance level of 133 while Aluminium has broken its downtrend line on hourly chart. We expect prices to head higher towards 122.50 levels.