Metals recover from early losses, Oil trades steady

March 9, 2018

London (Mar 9)  Precious Metals are trading lower today after the dollar index and stock market firmed in the previous trading session. Gold and Silver trended lower in the early session but have recovered since then to trade at 1320.60 and 16.49 respectively.

 The euro gave up gains against the dollar after Draghi indicated kept interest rates unchanged and said that monetary policy would be accommodative and any changes would be gradual.

 President Trump’s decision to impose import tariffs of 25% on steel and 10% on Aluminum on all countries excluding a few key allies was also a relief to the stock markets and further helped sour the sentiment for precious metals.

 The intraday bias should remain neutral with traders focusing on the key employment situation report scheduled in the evening.

 We maintain a neutral outlook on prices and would wait for NFP reports before taking positions in prcious metals. MCX Gold finds strong support at 30300 and then further lower at 30100 whereas, on the upside, critical resistance comes into play at 30500 in intraday.  Silver is consolidating into the range of 38900 - 38600.

Base Metals trade steady; Outlook remains weak

 Base Metals continue to remain weak despite the early short covering seen in the morning session. Copper and Nickel are trading in the green, at 6836.50 and 13387.50, up 0.27% and 1.36% respectively.

 China's CPI accelerated to +2.9% y/y in February, beating the expectation of +2.4%, from +1.5% a month ago. PPI eased to +3.7% from January's +4.3%. The market had anticipated a milder slowdown to+3.8%.

 The immediate term trend in Base Metals should weaken further after prices broke below key support levels this week. Copper should see further selling if it breaks below 445 and test previous supports at 442-438 next week.

 Nickel should also break further to test support at 840 and only a breakdown below this would see the metal decline to 800-810 in the short term.

Crude Oil recovers slightly; Rigs count to be key

 Crude Oil prices have recovered since morning having touched a low of 60.32 and is now trading at 60.63, up 0.85% whereas Natural Gas is down 2.737, down 0.69% currently.

 Crude Oil continues to trade with a negative bias as higher inventories and increasing production from the US force traders to cover longs and stay on the sidelines.

 The intraday bias remains weak and we expect prices to decline further if it breaks below 60.00 today with the next support levels placed at 59.20 today whereas, on the upside, a break above 61.00 should see prices move higher in the short term.

 Natural Gas also fell lower after storage reports showed a lower than expected draw in stocks – intraday supports are placed at 178-177 breaking which further downside can be expected today.



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