Gold

The Gold prices witnessed high volatility throughout the year 2018 and have recorded a high of around 7 per cent. The worsening macro eco-political factors such as the US-China trade tension, rising prices of crude and others led to a rise in the gold prices. Also, a fall in the rupee against the dollar supported the domestic prices well.

As per the data are drawn from the World Gold Council, central banks around the globe are increasing their gold reserves. This is known to be done by the central banks and government as a measure to cushion the economy against uncertainties. Purchase of gold by the central bank is among the highest in the last 5 years.

If it closes above 32500 on weekly basis then we have a target of 35000 on gold.

Crude

One word that can describe the movement of crude in the year 2018 is Volatility. The prices of crude oil witnessed high volatility in the Indian market, from going to an impressive high of the time to shedding 30 per cent value from its high, within a few months. The crude prices skyrocketed when Trump administration decided to reduce Iranian oil export through hard sanction. The price soared high therefrom. This prompted Saudi Arabia, who is a US ally, to pump up oil production to an all-time high. Along with Saudi Arabia, Russia and the United States accelerated their production.

This trend started to change when Trump government took an easy approach to Iran, by lifting the sanction temporarily. It also allowed India, China and other countries to buy crude from Iran. The move shocked the oil market which was now facing a potential supply glut. The falling oil prices prompted the  OPEC+ coalition to cut oil production by 1.2 million barrels a day from the oil market in the first quarter of 2019.

Technical Outlook

We would buy crude in the zone of 3200 and would add more at 2900 zone. We are expecting consolidation year for crude with good buying opportunity at the levels we mentioned. While on NG we are mildly bearish for next year.

Metals

Most of the metals plunged on weaker demand, both domestic and international. The precious metals including Gold and silver gave a negative return of 4.89 per cent and 13.91 per cent respectively (at the time of writing). Platinum was gloomy with -15.20 per cent. Palladium, which is widely used in petrol engines, gave a positive return of 16.9 per cent, as the demand for diesel engine tumbled.

The base metals too lost its strength to give negative returns. Aluminium registered a -15.07, where Copper and Steel ended up giving -15.39 per cent and -15.96 per cent. Zinc was the biggest loser with a return of -23.38 per cent.

Outlook 2019

On metal pack, we are not expecting major movement on either side. However, we remain mildly bullish on metals. So buy on major dip would be the correct strategy.