7/07/2011 05:31:00 PM
Your Advisor
Today in the evening session of the trade we have Euro Zone interest rate which is expected to increase hence would pressurize U.S. Dollar. We also have the U.S. Jobs data pointing to fragile U.S. labor market and a lower than expected reading in ADP payrolls change and higher than expected figure in jobless claims would support the Precious Metals Complex.
Crude Oil Trend
Crude oil declined 0.3 percent on the Nymex on Wednesday as an interest rate hike by China and rising worries over Euro Zone debt crisis raised demand concerns. Additionally, unfavorable data from the US, a stronger dollar and mixed sentiments in the global markets also exerted pressure on oil prices yesterday. However, sharp decline was cushioned on account of fall in US crude oil inventories.
Crude oil prices are expected to trade with a sideways bias today mainly taking cues from dollar strength, weak global market sentiments and Euro Zone concerns. Expected decline in US crude oil inventories will cushion sharp fall in oil prices.
Silver Trend
COMEX Silver Sept futures also moved along with Gold and rose by 1.43 percent to close at $35.916 per troy ounce from $35.410 per troy ounce on 5 th July, 2011. Investment demand for Silver at iShares Silver trust remained unchanged yesterday while Gold/Silver ratio edged down further to 42.5 from 42.83 the prior day indicating more strength in the white metal.
Base Metal Trend
MCX Copper Trend
Copper declined 0.3 percent on the LME on Wednesday mainly due to China’s move to curb inflation and dollar strength. But sharp decline was cushioned on the back of supply disruptions in Indonesia and Chile. In Indonesia, a strike for higher pay has paralyzed production at Freeport McMoRan Copper & Gold's giant Grasberg mine. While in Chile, some workers at state-owned Codelco are planning a one-day walk-out, while unions in Peru called off a two-day strike at the last moment. Chile’s Collahuasi copper mine is coming back to normal after severe weather that affected the operations in the world’s third largest copper mine.
We expect base metals are expected to trade with a negative bias today on the back of a stronger dollar coupled with China’s latest move to raise its interest rates. Additionally, increasing concerns over Euro Zone debt crisis will also exert pressure on prices.
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