MUMBAI: Today’s trading session on the commodity bourses was witness to a mixed trend. Traders were seen adopting caution ahead of the outcome of FOMC meet scheduled later in the day. Currency cues have been supportive so far, as markets expect little change in the policy stance by the US Federal Reserve. Interest rates in the US are maintained near zero level for an ‘extended period’ in an effort to lift the sagging economy out of the woods. The decision is crucial considering its implication on consumption patterns in the world’s largest economy which is struggling to return to growth. Meanwhile, US housing starts data showed slower growth in construction activity as against forecast. The data fuelled a decline in the dollar besides leading to a rise commodities’ investment allure.
We have already seen dampening effects on fuel demand from a sluggish trend in economy. Crude oil prices have been on the decline for the last two consecutive days. However, US crude oil futures have recovered near $80 a barrel. Last night, oil futures lost 1.8% - the lowest close in two weeks as the dollar remained strong. Nymex crude oil for April settlement was last quoting at $80.30 a barrel, up 50 cents.
The OPEC meet scheduled this weekend may leave output policy unchanged if the oil market remains stable. Domestic crude stockpiles likely rose last week as markets await industry and government inventory reports.
Gold prices inched up underpinned by ongoing concerns over Europe's debt problems, but rises were capped with investors wary about a possible monetary tightening in and ahead of a rate decision.
Spot gold was up 0.5% at $1,115.05 an ounce, compared to New York's notional close of $1,108.10. US gold futures for April delivery rose 0.7% to $1,113.10 per ounce, compared with $1,105.40 on the COMEX division of the NYMEX.
The world's largest gold-backed exchange-traded fund, SPDR Gold Trust, said its holdings stood at 1,115.51 tonne as of March 15, unchanged from the previous business day.
Shanghai copper reversed early declining trend as bargain buying emerged at lower level. In previous session, base metal counters succumbed to a stronger dollar. Three-month copper on the London Metal Exchange (LME) fell 2.1% to $7,310, and dipped to a near-two week low of $7,270 in late trade. Copper extended losses to $7,296, some $86 down from where the LME traded when Shanghai closed. Copper has since recovered and was last quoting $25 higher at $7,370 a tonne.
Sentiment was underpinned by another fall in LME copper stocks, down for the ninth day running and their longest run of declines since an extended period of stock draws in the second quarter of last year.
Domestic commodity counters joined global market in staging some recovery despite tepid participation. Today being a holiday in many states, trading activity was sluggish. Crude oil prices have recovered so also the prices of gold and base metals. Earlier, in the day crude oil prices slid tracking overseas markets. MCX crude oil futures for March settlement moved between Rs 3,664 and Rs 3,626 before retracing to current level of Rs 3,653 per barrel.
MCX Gold for April settlement contract last quoted at Rs 16,620 per 10 grams after moving between Rs 16,629 and Rs 16,554 per 10 gram. MCX Silver May settlement contract traded 0.7% higher at Rs 26,929 per kg, after having opened the session at Rs 26,820.
Base metal counters garnered strength from gains in London. MCX copper for April settlement was last quoting 0.7% higher at Rs 336.65 per kg, after opening the session at Rs 334.50. MCX zinc March contract added 1% to trade at Rs 104.25 per kg.
