Precious Metals, Crude Oil and Base Metals: Volatile Trends Amid Dollar Weakness

Published 15-01-2025, 09:25 am

Gold and Silver: Slight Gains Amid Dollar Index Weakness

On Tuesday, gold and silver recorded slight gains in international markets, supported by profit-taking in the dollar index and easing U.S. 10-year bond yields. Gold February futures settled at $2,682.30 per troy ounce, up 0.14%, while silver March futures closed at $30.351 per troy ounce, also up 0.14%.

In domestic markets, the recovery in the rupee led to mixed results. Gold February futures ended at ₹78,156 per 10 grams, marking a marginal loss of 0.01%, while silver March futures gained 0.05%, closing at ₹90,556 per kilogram.

Cooler-than-expected U.S. Producer Price Index (PPI) and core PPI data bolstered precious metal prices. The PPI for December rose by 0.2% month-on-month, below the anticipated 0.4%, while core PPI remained unchanged at 0.2%. The upcoming U.S. Consumer Price Index (CPI) data is expected to provide further directional cues for bullion markets.

Recent reports of a potential ceasefire deal between Israel and Hamas, including the release of Israeli hostages, may reduce safe-haven demand for gold and silver. Key technical levels for gold suggest support at $2,634 and resistance between $2,696-$2,722 per troy ounce. For silver, support stands at $29.50, with resistance at $30.60-$30.88 per troy ounce. Volatility is expected to persist amid U.S. inflation data and global market trends.

Crude Oil: Price Decline on Inventory Data and Geopolitical Developments

Crude oil prices retreated from six-month highs on Tuesday, pressured by an increase in U.S. gasoline inventories and reports of a potential Israel-Hamas ceasefire. WTI crude settled at $76.37 per barrel, while Brent crude closed at $80.38 per barrel. In domestic markets, crude oil futures fell 1.84%, ending at ₹6,736 per barrel.

According to the American Petroleum Institute (API), U.S. crude oil inventories declined by 2.6 million barrels for the week ending January 10, lower than the expected 3.5 million

WTI crude oil is expected to trade in the range of $72.00-$80.00 per barrel this week, with key support levels at $75.40-$74.70 and resistance at $77.20-$78.00. Natural gas prices also experienced high volatility, recovering from lows due to cold weather conditions in the U.S. and Europe. Natural gas is likely to trade in the $313-$369 range in domestic markets, with strong support at $3.00 in international markets.

Base Metals: Positive Momentum Amid Dollar Weakness

Base metals posted gains on Tuesday, supported by a weaker dollar index and cooler-than-expected U.S. PPI data. On the London Metal Exchange (LME), 3-month copper settled at $9,169 per metric tonne, up 0.78%.

The dollar index's retreat from two-year highs provided a tailwind for industrial metals. Reports of a potential Israel-Hamas ceasefire also bolstered sentiment. Copper remains above $9,000 per metric tonne, with resistance at $9,220-$9,380 and support at $8,770.

Other base metals like aluminum and zinc faced resistance at higher levels. Aluminum prices may encounter resistance around $2,640 per metric tonne, while zinc faces resistance at $2,920 per metric tonne.

In domestic markets, copper January futures have support at ₹827-₹824 and resistance at ₹833-₹836. Nickel, zinc, lead, and aluminum are also trading within defined ranges, with technical levels suggesting limited upside unless significant market drivers emerge.

Key Takeaways:

  • Precious metals remain volatile amid U.S. inflation data and geopolitical developments.
  • Crude oil prices face pressure from rising gasoline inventories and ceasefire reports.
  • Base metals gain support from a weaker dollar and favorable global cues.

Investors should monitor upcoming U.S. CPI data and geopolitical developments closely, as these factors will likely shape market trends in the coming week.

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