Gold is trading at 1297.10, down 0.15% whereas Silver is at 16.39, up 0.10% currently.
Precious Metals had a volatile session last evening as geopolitical risk brought back safe-haven demand for bullions but the market remained largely focused on a strong dollar index and falling oil prices.
Prices pushed higher to test $1300.0 as the Italian president blocked an anti-establishment government from forming increasing the likelihood of early elections and also an upcoming election in Spain contributed to the upside. The uncertainties surrounding both the nations also increased fears of a split from the Euro-Zone and pushed the Euro lower in the US session.
A stronger dollar index which is at its highest level since November 2017 along with increased chances of rate hikes limited the upside in precious metals. On the data front, we have the nonfarm employment change report from ADP along GDP for the first quarter followed by the FED's Beige Book late in the night.
The intraday remains neutral on precious metals.
Base Metals decline further on Trump threats on import tariffs
Base Metals remained under pressure last evening driven by political uncertainty and a strong dollar. Prices were down in the Asian session but have recovered since then with Copper at $6805.0, down 0.35% whereas Nickel is at $14910.50, up 0.45% currently.
The shutdown of Vedanta's 400,000 MT of Copper smelter cuts 1.7% of global supply and may support Copper prices in the short term, the smelter which accounts for about half of India's Copper output should also see increased import demand from the country in the short term.
Zinc prices may also come under pressure as increasing smelter capacity and reduction of auto import tariff in China pressure prices while we also note that falling on-warrant zinc inventories in LME warehouse point to a tightening market in the short term.
The intraday bias on Base Metals is negative. President Trump also said that he would go ahead with 50 billion in tariffs on Chinese imports, reigniting trade war worries ahead of the June 2-4 meeting.
Technically, we expect base metals to trade steady today with a negative bias.
Oil prices consolidate; OPEC meeting to weigh on prices
Crude Oil is trading at 69.09, up 0.54% whereas Natural Gas is at 2.88, down 0.52% currently.
Crude Oil prices continued to consolidate above key support levels at $66.0 and may attempt to stage a pullback this week ahead of the weekly oil inventories report scheduled on Thursday.
Primarily, supply concerns from Venezuela and Libya along with sanctions led disruptions from Iran helped prop up prices but reports indicating an output increase from Russia and Saudi Arabia in June to offset the shortfall pushed prices sharply lower.
We believe that the oil prices may continue to remain lower for longer as increasing production from the US which is at 10.7 mbpd, behind Russia along with increasing oil rigs continue to mount pressure on prices in the short term. Trump's proposal to halve the SPR over the next decade also added to supply concerns for Crude Oil.
The intraday bias is on the weaker side and we may see momentum based short selling if prices break below intraday support at 4490.0 whereas upsides are expected to take resistance at 4570.0 today. - Commodity Online -