Bullion to remain volatile; Base metals may trade choppy

MUMBAI-INDIA (Aug 2)   Bullion counter may remain sideways on volatile path. On domestic bourses some weakness in the local currency rupee can cap the downside. Today nonfarm payroll data will give further direction to the prices. Gold (Oct) contract can move in range of 27500-28300 in MCX.

Silver (Sep) contract can move in range of 40500-42000 in MCX. Gold fell a sixth day in the longest run of losses since May, heading for the first weekly decline in a month, as U.S. economic data backed the case for less stimulus. Data today may show that U.S. unemployment fell in July, while employers added 185,000 jobs.

The Federal Reserve said this week that it will maintain its $85 billion monthly asset-buying program and that persistently low inflation could hamper the economic expansion.

Base Metals: Base metal complex may trade choppy as investors will eye the US factory orders and unemployment data scheduled later today. Copper capped the biggest two-day rally since early May after the Federal Reserve maintained bond purchases and manufacturing unexpectedly expanded in China, the world’s largest user of the metal.

World copper supply, bolstered by rising mine output, may outstrip demand in 2014 for a second year and touch a five-year high, according to Pan Pacific Copper Co., Japan’s top producer. Copper may trade in range of 420-430 in MCX. Lead may trade in range of 126-130 while zinc may trade in range of 110-113 in near term. Aluminum may remain in range of 107-109.

Energy: Upside momentum in crude oil may persist as it can move further higher towards 6600 in MCX. West Texas Intermediate crude rose for a second day and is poised for a weekly advance after manufacturing accelerated last month in the U.S., signaling increased demand in the world’s biggest oil consumer.

Government data today may show employers added jobs in July at about the same pace as in the previous month, trimming unemployment. Libya’s head of oil security quit as labor protests shut crude-export terminals in the country. While natural gas prices can slip lower on selling pressure.