Bullions remained volatile today. Gold showed some recovery in morning trade on bargain hunting as against 9-percent fall in prices last week. A recovery in crude oil prices and a weaker dollar against the euro gave investors enough reasons to step into the market. European stocks were set to rise as investors awaited corporate results and after European Central Bank President Jean-Claude Trichet pledged to do whatever it takes to restore confidence to financial markets. Confidence among Americans fell by the most on record and single-family housing starts hit a 26-year low, reports showed on Friday, posing an increasing threat to consumer spending that accounts for more than two-thirds of the economy.
Crude Oil inched up to $74 a barrel, supported by expectations OPEC may cut output this week to boost prices that have fallen more than 50 percent in just three months from a record high above $147 a barrel. OPEC might not need a hefty oil output cut when it meets on Friday, a source in the group told a Gulf newspaper, as others in OPEC talked of a possible reduction of over a million barrels per day perhaps in stages. A cut in OPEC oil output, suggested by some in the group ahead of its Friday meeting, may hurt global economic recovery, the International Energy Agency's head said on Monday. The IEA is concerned (an OPEC cut) might have a negative impact on the global economic recovery. But a global economic slowdown could lessen the impact of any OPEC cuts to defend prices.
Base metals improved in morning but later in day they slipped. Copper rose more than 3 percent today after sharp declines lured buyers back to the market and rising European equities supported prices, but slowing growth in China kept investors on edge. The dollar weakened against the euro, making dollar-priced metals cheaper for holders of other currencies and global stock markets bounced as investors took comfort in efforts to prop up the banking system. Bargain hunting also lifted sentiment with copper prices down by a third in the past three weeks as fears of a world-wide recession sent markets into a tailspin. Aluminum slid by $7 to $2,198 a tonne, lead rose $12 to $1,452 a tonne and nickel fell $50 to $10,750 a tonne. Tin gained $200 to $13,200 a tonne and zinc rose $27 to $1,257 a tonne.
