Gold drifted lower today, reversing earlier gains after oil markets trimmed gains and the dollar gained strength. The bias is towards the downside only however the festive season and depreciating rupee has kept MCX gold supported. The dollar gained ground overnight on comments by Fed chief Ben Bernanke urging Congress to throw more money at the financial crisis. As liquidation will continue by hedge funds in New York this week so there are chances that the bulls in the yellow metal will remain out of the market. Due to various measures taken by government to control financial crisis and stabilize equity markets bullions may see further downside in the coming days.
Crude oil fell today in the morning session after it rose yesterday on concerns that OPEC might reduce output in the meeting due on 24th October in Vienna. Russia, Iran and Qatar, holders of more than half of the world's natural gas, agreed to form a gas troika for joint exploration and production. The U.S. and Europe have warned against the Iran-led initiative to create a gas OPEC aimed at controlling supplies and prices. Non-OPEC oil producers like Russia, Norway and Mexico should contribute production cuts to help stabilise sagging prices, OPEC President Chakib Khelil said. He further said that if oil prices fell below $70 a barrel many oil projects internationally will be delayed or die therefore the prices should remain between $70 to $90 a barrel to help everyone.
Copper has touched a low of $4463 a tonne at the LME today giving more bearish outlook for the metal. The prices of both copper and zinc also fell in Shanghai due to slowdown in China's economy which is slowing purchases nowdays. China's industrial production growth in 2009 may be half this year's pace, Surrey, England-based research company CHR Metals Ltd. However, the inventories of the metal declined by 6,500 tonnes, or 3.1 percent but still could not hold the prices at higher levels. Nickel is the only base metal has been showing an upside move today on the news that Canada's First Nickel Inc suspended production at its Lockerby Mine and cut about 150 jobs as the mining and exploration company is grappling with low metal prices amid a wider market slowdown.
