Gold futures ended lower on Thursday due to a surge in oil prices that boosted bond yields, denting interest in non-yielding gold as an alternative investment. Yellow metal prices declined further as the Federal Reserve is expected to raise interest rates in December, barring a major disappointment in tomorrow's November jobs report. Employment is expected to increase by 170,000 jobs in November after climbing by 161,000 jobs in October, while the unemployment rate is expected to hold at 4.9 percent. The Institute for Supply Management also released a report showing a bigger than expected increase by its index of manufacturing activity. The ISM showed that its purchasing managers index rose to 53.2 in November from 51.9 a month earlier.
The import of gold remained stable at around 100 tonnes in November compared to 97 tonnes of import recorded in the month of October. This stable import was despite fall in sales of jewellery due to cash crunch post demonetisation. The overall gold imports in the October-December quarter is expected to be around 250 tonnes, which is almost similar to the year-ago period. All India Gems and Jewellery Trade Federation (GJF) expects the overall gold imports for the current calendar to decline to 650 tonnes from 850 tonnes last year due to poor sales following strike by jewellers for two months against the government decision to impose one per cent excise duty. India’s gold demand declined by 28% to 194.8 tonnes during July-September quarter of this year, according the World Gold Council’s report, due to high prices, not so recovered rural wallet and regulatory changes.
Crude oil futures continued their surge on Thursday, after Russia joined the deal, the first of its kind between the Kremlin and OPEC in fifteen years. Earlier the OPEC surprisingly announced a deal to curb supplies. OPEC produces a third of global oil, or around 33.6 million barrel per day, and the deal aims to reduce output by 1.2 million bpd from January 2017, similar to January 2016 levels. While the Nymex crude crossed the $51/barrel, the brent crude surged to its highest in about 16 months. However, production in the US is expected to climb, as production overseas declines. President-elect Trump has also promised to open up previously prohibited lands to oil exploration and drilling once he is in office, just 50 days from now.
Copper futures ended higher on Thursday, driven by oil price rally and continued speculative interest after data showed China's factory activity expanded modestly in November. The official manufacturing Purchasing Managers' Index (PMI), which measures large state-owned factories, came in at 51.7 in November-matching the previous high in July 2014 and the highest since the 53.3 hit in April 2012. However, growing doubts about the sustainability of a post US election rally, capped some gains.
Technical Level
Gold (Feb)
Support at 27850 and Resistance at 28250
Looks weak could touch its support level of 27850. Further downside panic will see only close below 27850 else could test its resistance level of 28250 again.
Trade with levels only.
Silver (March)
Support 40800 and Resistance 41300
Break and sustain below 40800 it can touch 40300—39800 mark else could test its resistance level of 41300.
Further upside rally will see only weekly close above 41300
Crude Oil
Support at 3450 and resistance at 3510--- 3550
Either side break or close with volume will decide further.
Trade with levels only
Copper
Support at 392 and resistance at 405
Weekly close below 392 will see sharp downside panic till 384—381 and then to 375 mark in days to come else could test its resistance level of 405 again
Further upside rally will only close above 405 mark.
Major Economic Data Updates
11:30 P.M FOMC Member Tarullo Speaks
More will update soon!!
