Commodity Prices Expected to Slide Amid Rising Yields and Improved Oil Flows
Market experts at ICICI Direct are predicting a downturn in several key commodities. The US dollar's firmness and rising Treasury yields are putting pressure on gold prices, which could slip below $4,100 if the Fed's preferred inflation metric, the Core PCE Price Index, shows signs of rising inflation. MCX Gold December is expected to face resistance near Rs151,500 and dip towards Rs148,000-Rs147,000 levels.
The outlook for metals is mixed, with copper prices expected to find support due to tight supplies and robust demand from China. Depleting inventory levels in both the Shanghai Futures Exchange and LME are also providing strong support. MCX Copper October is expected to rise towards Rs1420 as long as it trades above Rs1392.
Meanwhile, crude oil prices are expected to trade lower due to improving Middle Eastern oil flows easing supply concerns. A planned release of 40 million barrels from the Strategic Petroleum Reserve (SPR) and expectations of a 1-million-barrel increase in U.S. commercial inventories last week are also weighing on prices.
Natural gas price is expected to move lower towards Rs290 level as long as it stays below Rs300, according to ICICI Direct's prediction.