Commodity MCX Updates

Spot gold prices came under pressure mainly due to strength in the US dollar today. The yellow metal prices touched an intra-day low of $1413.79/oz and were trading at $ 1417.41/oz till 4.00 pm IST today. However, on the MCX, gold prices were up by almost 0.3 percent, as depreciation of the Rupee supported prices on the Indian markets today.

Spot Silver prices were trading lower by 0.3 percent and hit an intra- day low of $30.63/oz till 4.00 pm IST today. The white metal prices declined mainly on account of strength in the US dollar. Due to depreciation of the Indian Rupee silver prices gained around 0.5 percent on the MCX and were hovering around `46472/kg till 4.00 pm IST today.

Economic data to be released from the US today are - ISM manufacturing PMI, construction spending and ISM manufacturing prices. We expect metal prices to trade with a positive note mainly taking cues from rising copper prices. Copper prices are expected to trade higher mainly due to its positive forecast of increase in demand for the next year from China, the world’s largest metal consumer. Crude oil prices are expected to trade with a positive bias today mainly taking cues from hopes of increasing demand for the crude oil from the colder regions for the heating purpose. But sharp gains will be capped due to strength in the US dollar today. We expect gold and silver prices to trade higher today as economic uncertainties continues as we step into 2011. But sharp gains in prices will be restricted on account of dollar strength.

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