Gold futures to trade higher on US Fed rate outlook

Mumbai-India (Feb 26)  European markets are trading on a positive note owing to positive economy data from Germany. Asian markets ended mixed and the US stock futures are trading in the green.

GfK German Consumer Climate surged to 9.7 levels in February from 9.3 in January. German Unemployment Change declined by 20k in January as against a fall of 10k in December. UK’s Second Estimate GDP q/q remained unchanged at 0.5 percent for the quarter ended December.

Spot gold prices is trading higher by 0.6 percent as recent comments from Federal Reserve Chair Janet Yellen pushed back expectations for the first U.S. rate hike in nearly a decade to later in the year. Firm Chinese physical demand also supported bullion as buyers from the world's No. 2 consumer trickled back into the market after the long Lunar New Year break. On the MCX, gold prices are trading higher by 0.7 percent at Rs.26422/10 gms.

Spot silver prices are trading higher by 1.6 percent at $16.47/oz taking cues from rise in gold prices and weakness in the DX. On the MCX, silver prices are trading higher by 1.6 percent at Rs.36535/kg in line with international trends.

LME copper prices jumped by more than 2 percent as a drought in Chile is hampering copper production, a water-intensive business, in the world's biggest producer of the metal, one more factor that could trim an expected surplus this year. Also, weakness in the DX supported gains. MCX copper prices are trading lower by 0.4 percent at Rs.361/kg in line with international trends.

Brent crude oil rose above $62 a barrel on Thursday as indications of a coming recovery in demand offset a further jump in U.S. crude stockpiles which underlined currently ample supplies. On the MCX, oil prices are trading lower by around 1.7 percent at Rs.3069/bbl.

On an intraday basis, we expect gold and silver prices to higher as comments from Federal Reserve Chair Janet Yellen led investors to believe U.S. interest rates would start to rise later than expected this year.

We expect oil prices to trade lower as bulging U.S. crude stockpiles offset glimpses of an oil demand recovery. However, Saudi Arabia’s influential oil minister, Ali al-Naimi, comments that oil demand was growing and that markets have calmed will restrict sharp fall in prices.

We expect LME Copper prices to trade sideways as Both Anglo American and BHP Billiton have said the extremely dry conditions in Chile have hit production due to restrictions on water. However, estimates of mixed economic data from the US will restrict sharp upside.

Source: AngelCommodity