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Daily Metal and Energy Outlook 12th April

BULLION – Bullion counter may witness some lower level buying after the yesterday sharp fall. Gold prices steadied on Friday, having posted their biggest daily decline in two weeks in the previous session after robust U.S. economic data lifted the dollar. The dollar held firm on Friday after strong U.S. labour and inflation data soothed concerns about the world largest economy, while falling oil prices weighed on commodity-linked currencies such as the Canadian and Australian dollars. The number of Americans filing applications for unemployment benefits fell to a 49-1/2-year low last week, pointing to sustained labor market strength that could temper expectations of a sharp slowdown in economic growth. U.S. President Donald Trump on Thursday expressed a willingness to hold a third summit with North Korean leader Kim Jong Un but said in talks with South Korean President Moon Jae-in that Washington would leave sanctions in place on Pyongyang.

ENERGY- Crude oil may trade higher as oil prices were firm on Friday, supported by ongoing supply cuts led by producer club OPEC and by U.S. sanctions on petroleum exporters Iran and Venezuela. Oil markets have been pushed up by more than a third this year by supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC), U.S. sanctions on oil exporters Iran and Venezuela, and escalating fighting in Libya. Production in Venezuela has been plunging as the U.S. sanctions add to a deep economic and political crisis, while the U.S. government is expected to tighten oil sanctions against Iran in May. OPEC and its allies will meet in June to decide whether to continue withholding supply, and while OPEC de-facto leader, Saudi Arabia, is seen to be keen to continue cutting, sources with the group said it may raise output from July if disruptions elsewhere continue.

BASE METAL – Base metals prices may trade with sideways bias. London copper prices edged up on Friday amid a weaker U.S. dollar, while nickel contracts in both London and Shanghai fell despite analyst warnings of supply shortages. The dollar was down against a basket of major currencies on Friday, making it cheaper for buyers using other currencies to purchase greenback-denominated metals. The global nickel market will face grave supply shortages unless key Chinese-led projects in Indonesia come online in a timely manner, analysts said on Thursday. London nickel fell 0.6 percent, after declining 1.9 percent in the previous session in its biggest drop in four weeks. Shanghai nickel declined 2.4 percent. LME nickel inventory continued to hover around its lowest level since 2013, while on-warrant nickel inventory in warehouses tracked by ShFE stayed around its lowest since 2015.

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