Spot gold prices traded sideways in the afternoon session today and were last trading at $1366/oz at 4.00 pm IST. However, on the MCX, gold prices were trading in the green, gaining slightly by 0.1% on the back of a weaker Rupee. On the equity front, the Asian markets mostly ended in the red ahead of the weekend as investors remained skeptical over the Euro zone economic issues. Moreover, there were also rumours of another attack in Yeonpyeong Island in South Korea, which later was found to be untrue.
China’s move to control inflation exerted downside pressure on copper prices on the LME today. Prices declined sharply by 1.6% in the international markets, ouching an intra‐day low of $8161/tonne on the LME till 3.45 pm IST today. In addition to this, the US dollar continued to gain against other major currencies, and this factor further exerted downside pressure on the metal prices. On the MCX, copper prices declined more than 1% and were hovering at `375.85/kg till 3.45 pm today. Losses on the MCX were slightly less on the back of depreciation in the Indian Rupee. Spot Rupee declined by 0.5% today, making it a third consecutive weekly decline.
Strength in the US dollar and weak sentiments in the global equity markets led to decline in crude oil prices today. China’s step to increase e margins on the
commodity futures in order to curb the inflation further pressurized oil prices in the global markets today. Oil prices declined almost 1% on the Nymex, touching an intra‐day low of $83.08/bbl till 3.45 pm IST. Crude oil prices slumped by 0.5% on MCX, and were hovering at `3833/bbl around the same time.
Out Look
There is no major data to be released from the US today and the markets will be open only for the first half of the day in the US. Copper and crude oil prices will take cues from the movement in the DX today. We expect the dollar to remain strong today mainly on the back of ongoing concerns with regard to Euro Zone debt crisis. Commodity prices are expected to remain under pressure ahead of the weekend as investors will try to stay away from riskier assets as the Euro zone concerns have gripped markets. Gold prices are expected to remain firm and trade with a positive bias in the evening session on the back of safe‐haven demand.
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