Precious Metals steady, Base Metals and Crude Oil trend higher

December 20, 2017

London (Dec 20)  Precious Metals are trading steady today despite the progress on the tax reform bill and stronger global stock markets. Gold is trading at 28494, up 89 points or 0.31% and Silver is at 37608, up 218 points or 0.59%.

 The tax reform bill which was approved in the Senate but another round of voting is due today after a few modifications to the original bill. The clearing of the tax bill would be a first major legislative victory for the Trump administration since taking office.

 The market reaction remained largely muted as the stock markets correct slightly on profit booking along with the greenback which provided the boost for bullions in intraday.

 We maintain a positive outlook on precious metals in intraday and would recommend considering buying above at current levels with stop losses below support at 28400 for price objectives at 28600-700 in intraday.

Base Metals trend higher on bullish sentiment

 Base Metals are trading higher but risk the chances of correcting later in the evening session. Nickel is the best performer today gaining about 1.50% to trade at 763.60 whereas Zinc is at 207.20, up almost a percent. Copper is up 0.64% to trade at 451.30 currently.

 Copper is facing a key resistance at 452.50 and further upside is expected only on a break above this level and we feel that failure to break above this could see prices correct sharply in the short term. On the downside, support is seen at 449 and then further lower at 444-45 this week.

 With the exception of Aluminum and Zinc, all the metals are expected to trade with a weak bias in intraday today. The reduction of export duties on steel and products in China should open up the market to further demand for nickel and other base metals.

 Nickel is trading with a positive bias and upsides are expected to remain limited to 775 this week from where a corrective move lower is expected.

 We maintain a mixed bias on base metals.

Crude Oil steady as technical breakout and API report supports upside

 Crude Oil is trading steady ahead of the weekly inventories report. MCX Crude for January delivery is trading at 3706, up 8 points and Natural Gas is trading at 175.10, up 0.34% currently.

 The American Petroleum Institute (API) reported earlier on Wednesday that oil inventories in the US may have declined 5.22 mln along with a draw of 2.85 mln in distillates whereas gasoline stocks may have increased by 2 mln for the fifth straight week boosting the bullish sentiment for oil in early trade.

 The EIA is also expected to report a marginal draw in oil and distillates with a build in gasoline. Despite the bullish report, the trading has remained thin and we expect the market to rally sharply above resistance at 3715 whereas on the downside, a break below 3690 could trigger a profit booking move in the commodity.

 On the daily charts, a strong continuation pattern known as a ‘symmetrical triangle’ is indicating the beginning of a strong upside rally in prices which could see Crude Oil rally to 4000 or above in the next few weeks.


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