Gold upheld above $860 an ounce as dollar weakened against euro. The dollar has been suffering as the Federal Reserve slashed interest rates to between zero and 0.25 percent on Tuesday. Besides profit taking, weaker oil prices are also putting pressure on gold. The market is now looking ahead to economic data of U.S. Philadelphia Fed Business outlook and leading indicator indices later today for clues to further direction of gold. U.S. reports today may show that country’s jobless claims remained elevated which can support bullions price further. Silver also has been performing well in the last few days and is now trading well above $11 an ounce.
Crude oil slipped after the inventory rise ignoring OPEC decision of output cut. The Organization of the Petroleum Exporting Countries yesterday agreed to cut 2.2 million barrels daily of output starting Jan. 1, slightly more than expected. Russia and Azerbaijan signaled they be willing to reduce supplies as well. Global stockpiles could fall as much as 3 million barrels a day in the first quarter of next year, according to Petromatrix GmbH. So far, OPEC producers have not signaled declines in crude supply for January after the agreement. Next year's outlook is increasingly bleak as economic indicators show a deep global recession taking hold, causing oil demand to fall from the United States to China.
Base metals plunged as LME inventory continued piling up. Copper stocks at the LME-monitored warehouses rose by 2,275 tonnes to 324,175 tonnes. Copper on the London Metal Exchange (LME) shed 2 percent on Thursday to dip below the psychological $3,000 level and near 4-year lows. Demand for red metal may fall further as the global economy tips into recession and even a weaker dollar is not supporting the metals. Aluminum pared declines in LME after China, the world’s largest producer, decided not to lower export taxes that may have boosted supplies. Zinc increased to $1,110 a tonne, aluminium declined to $1,478 a tonne, nickel fell to $9,470 a tonne and lead decreased to $960 a tonne.
