4 Macro Factors That Could Spark A Gold Rally This Week.
1. Fed Meeting – the Federal Reserve is widely expected to pull the trigger on a 25 basis point rate increase at the conclusion of its two-day meeting on Wednesday. Important to monitor will be the language surrounding the rate hike and the pace of potential future interest rate increases. Currently, the market is expecting two to three rate hikes in 2017 and hints that the Fed may deviate from that path with even more tightening could weigh on gold. If the Fed chief signals that intentions remain the same for roughly two to three hikes, that would be gold-neutral, as the market has largely priced that in already.
2. The Dutch election - The Netherlands hold their general election on Wednesday. With populist and protectionist movements gaining force across Europe, the Dutch election will be viewed as an early bellwether regarding the strength of anti-European populism. Watch the outcome: the right-wing populist candidate is Gert Wilders of the People's Freedom Party. Notable elections later in 2017 include the French and German elections. A shifting tide in Europe toward protectionist economic policies would be gold-bullish.
3. Consumer Price Index data – U.S. CPI data is slated for release Wednesday. Higher inflation readings would be gold-bullish.
4. President Trump's Budget- The president is expected to release his fiscal 2018 budget outline this week. Will deficit-hawks push back against proposals that increase the deficit? Rising deficits are bullish for gold.
Will Zinc Get Boost after Output Cut Deal?
Zinc prices fell noticeably last week. But zinc concentrate TCs in Central West China and some other regions were still low between 3,600-3,800 yuan per tonne (zinc content) with benchmark price at 15,000 yuan per tonne, SMM understands. Smelters incurred 200 yuan per tonne losses. Smelters thus plan to adjust their output plan.
Zinc smelters in Central West China agreed to slash output in the near term at a seminar. Shaanxi Dongling Industry & Trade Group prolonged maintenance plan to 1-2 months, compared to previous 15-20 days maintenance plan in mid-to-late March. Hamhung Zinc Industry Co. and Shangluo Smelter may also undertake maintenance. Such maintenance at these smelters will support zinc prices in the near term, SMM said. Key zinc smelters in Central West China which have over 200,000-tpy zinc smelting capacity met in Xi’an March 13 and reached a deal on several respects, SMM learned. They agreed to adjust production plan more flexibly since TCs of domestic and imported zinc concentrate are blow cost line.
Oil hovers near three-month lows as investors await data.
Crude oil prices hovered near three-month lows on Tuesday in early Asian trading as investors await key reports and data that may shed light on a supply overhang in the global market. Prices fell sharply last week as investors worried that swelling U.S. crude supplies would hinder OPEC's efforts to restrict output and reduce a global glut.
Prices had risen after the Organization of the Petroleum Exporting Countries (OPEC) and other major oil producers, including Russia, agreed at the end of November to rein in production by almost 1.8 million barrels per day (bpd) in the first half of 2017.
"It's shaping up to be another fun week in the crude complex, with OPEC releasing its monthly oil market report on Tuesday, swiftly followed by the IEA's monthly oil market report the day after," Matt Smith, analyst at Clipper Data, said in a note.
Precious Levels
CS GOLD (APRIL) OVERVIEW:
TREND : BEARISH
RESIST 2: 28550
RESIST 1: 28400
SUP 1: 28000
SUP 2: 27850
CS SILVER (MAY) OVERVIEW:
TREND : BEARISH
RESIST 2: 41000
RESIST 1:40800
SUP1: 40000
SUP2: 39700
Base Metal Levels
CS COPPER (APRIL) OVERVIEW:
TREND : BEARISH
RESIST 2:390
RESIST 1:388
SUP1:380
SUP2:377
CS NICKEL (MARCH) OVERVIEW:
TREND : BEARISH
RESIST 2:690
RESIST 1:680
SUP1:660
SUP2:650
TREND : BEARISH
RESIST 2:185.00
RESIST 1:183.50
SUP1:179.00
SUP2:177.50
CS LEAD (MARCH) OVERVIEW:
TREND : SIDEWAYS
RESIST 2: 153.00
RESIST 1: 152.00
SUP1: 148.00
SUP2: 146.50
CS ALUMINIUM (MARCH) OVERVIEW:
TREND : BEARISH
RESIST 2: 127.00
RESIST 1: 126.00
SUP1: 122.00
SUP2: 121.00
Energy Levels
CS CRUDE OIL (MARCH) OVERVIEW:
TREND :BEARISH
RESIST 2:3300
RESIST 1:3270
SUP1:3150
SUP2:3100
CS NATURAL GAS (MARCH) OVERVIEW:
TREND : BULLISH
RESIST 2:204.00
RESIST 1:203.00
SUP1:195.00
SUP2:193.00
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