Volatility could expect ahead of India Union Budget

Volatility could expect ahead of India Union Budget

Yellow metals retreated sharply from a nine-month high on Thursday. Gold prices saw selling pressure  after  U.S. GDP grew more than expected in the fourth quarter, but the reading still triggered a recovery in risk appetite, and helped the dollar recover from a near eight-month low against a basket of currencies.

By the Commerce Department, Q4 gross domestic product expanded by an annualized 2.9%, down from the year-on-year expansion of 3.2% in the third quarter, but still higher than Wall Street economists’ forecasts for a 2.6% growth.

Comex Gold stop steadied at $1,928.80 an ounce, while gold futures inched lower to $1,930.00 an ounce by 21:02 ET (02:02 GMT), down .65%.

 MCX GOLD Future settled neutral at 56962, down 0.01% on Wednesday.

Among industrial metals, copper prices moved little and settled at $4.2675, down 0.05%, but were set for a sixth straight week of gains as the U.S. GDP data helped deter fears of an immediate recession.

Crude oil settled almost flat at $81.07, up 0.26% amid caution over an upcoming OPEC+ panel meeting, as well as more cues on the U.S. economy from a reading on the Federal Reserve’s preferred inflation gauge.

Today, at 5.am- Japan consumer price inflation data for the Tokyo region stood at 4.3% as compared to previous reading of 3.9%. Japanese inflation is running at a four-decade high and is double the BOJ’s 2% target but the BOJ is pushing back against market bets that the end of its long-standing, ultra-loose monetary policy is near.

At 12.30 pm – Euro zone will release Spanish Flash GDP q/q data is foreseen at 0.1%, unchanged from previous 0.1% which could have neutral impact on Euro.

Furthermore, at 2.30 pm – Euro zone M3 Money Supply y/y data will come out, data is foreseen at 4.6%, lower from previous 4.8% which could have negative impact for Euro and metals prices. At same time Private Loan’s y/y could have neutral impact on currency as data foreseen unchanged from previous 4.1%.

Moreover, at 7.00 pm – US Core PCE Price Index m/m could have positive impact on dollar, as data foreseen at 0.2%. At the same time, Personal Income m/m data could bring some correction for dollar, as data foreseen at 0.2%, lower from previous 0.4% and Personal Spending m/m could extend negative sentiment  for dollar as data foreseen at -0.1%, lower from previous 0.1%. (Above data will give clutter for bullions and metal prices).

At 8.30pm – US Pending Home Sales m/m will come out data foreseen at -1.0%, lower from previous -4.0% which could have neutral impact for dollar as well as for bullions.

At same time Revised UoM Consumer Sentiment will come out which could have neutral impact for dollar.

Overall market sentiment may remain volatile today as focus will shift on Union Budget which will release next month.