MUMBAI: Commodity traders returning to trading after the extended weekend witnessed a muted response as some of the markets in Asia and Europe are still closed. However, the hopes of global economy activity gathering pace in the last quarter fuelled optimism in the commodity markets. There are hopes that commodity prices may start moving higher as demand picks up from countries in Asia and Europe. Meanwhile, currency continues to influence trading activity in commodity markets. The dollar regaining strength against the yen and euro this morning kept commodity prices under check.
Amongst leading commodity counters, crude oil, gold and silver witnessed brisk trade. Nymex crude oil prices rose to a 17-month high on speculation global demand will increase as the world economy recovers from recession. Crude oil for May delivery rose as much as $1.10 to $85.97 a barrel in after-hours electronic trading on the New York Mercantile Exchange, the highest since October 9, 2008. It was last trading at $85.74 in Asian electronic trade.
Oil trading resumed after the exchange closed on April 2 to mark the Good Friday-Easter holidays. A Labour Department report that day showed the US economy gained 162,000 jobs in March, the most in three years, buoyed by 48,000 temporary workers hired by the government to conduct the census.
A report today in the US, the world's largest oil user, will probably show service industries expanded for the third month in March, according to a survey of economists. Oil prices have established a floor of $75 a barrel, Venezuelan Oil Minister Rafael Ramirez said April 2. There is no need for OPEC to increase production, he said.
Gold moved within a narrow range in today’s session, with investors closely watching the movement of the dollar. Markets in Hong Kong and are closed for a holiday.
Spot gold was at $1,128.30 an ounce, up $2.50 cents from New York's notional close on Friday. It had hit an intraday high of $1,125.80 an ounce - not far from a two-week high $1,127.75 seen on April 1. US gold futures for June delivery barely moved at $1,126.20 ounce. The New York market reopens on Monday after the Easter holiday.
The world's largest gold-backed exchange-traded fund, SPDR Gold Trust said its holdings stood at 1,129.82 tonne as of April 1, unchanged from the previous business day.
Trading on the base metal counters remains tepid for lack of cues from London Metal Exchange (LME). Trading activity is shut in London till Tuesday. Trades are hoping to firm trends when they return to trade on Tuesday.
Last week most metal counters witnessed fresh buying interest prompted by strong economic data, softer dollar and on hopes of fresh fund infusion in Q2 from fund managers.
Last Friday, copper and nickel closed higher. LME copper was $7,880 a tonne, up $65 from $7,815 the previous day, while nickel retraced lower after having breached the psychological $ 25,000 barrier to register $ 25,660 a tonne. Zinc traded at $2,400.00 a tonne. Tin touched $18,400 a tonne, off its highest since September 2008.
Domestic commodity counters managed to hold on their recent gains helped by positive cues from the overseas market. Strong trend in the domestic equities favoured buying in industrial commodities. The rupee gaining against the dollar has, however, dampened the sentiment.
MCX crude oil futures for April settlement moved between Rs 3,844 and Rs 3,800 before retracing to current level of Rs 3,824 per barrel. MCX Gold for April settlement contract last quoted at Rs 16,392 per 10 grams after moving between Rs 16,450 and Rs 16,365 per 10 gram. The contract expires at the end of today’s session. MCX Silver May settlement contract traded marginally lower at Rs 27,334 per kg, after having opened the session at Rs 27,450.
Base metal counters surrendered gains to profit-taking. MCX copper for April settlement was last quoting at Rs 354.35 per kg, after opening the session at Rs 356.00. MCX zinc March contract traded flat at Rs 107.20 per kg.
