Spot Gold traded in the negative territory till 4.00 pm IST today as the dollar strengthened back on concerns in the Eurozone. The yellow metal prices usually trade inversely to the greenback. However, the gold prices may gain back as risk appetite in the financial markets worldwide may increase the charm of the yellow metal as an alternative safe-haven investment.
After the decision of the European Union to bailout Greece, other countries comprising of Spain, Portugal and Italy are facing deficit problems which is leading to growing concern amongst the investors. This may lead to a trigger in the greenback.
Copper prices were trading with a positive bias today till 4.00 pm IST with prices touching a high of above $8000/tonne on the LME. As mentioned by us earlier today, the stronger dollar was not able exert pressure on the red metal prices.
Copper prices have been rallying since last week mainly on positive economic data from US and China, improved outlook worldwide and the declining inventories on the LME and Shanghai warehouses. However, inventories increased marginally on the LME today, but increase in cancelled warrants- the metal booked for removal faded away the negative sentiment.
Crude oil prices traded sideways on the Nymex till 4.00 pm IST today after rallying in the last session. However, the prices would trade with a positive bias as upbeat economic data releases from the US and China has led to expectations that the demand for crude oil may increase from the world’s largest consumers. Nymex crude oil prices breached the 17-month high of $86/bbl yesterday.
Outlook
On the macroeconomic front, the US is expected to announce the minutes of FOMC meeting which will give a detailed record of the FOMC’s most recent meeting. The dollar is expected to strengthen as concerns in the Eurozone may drive demand for the dollar as a safe-haven.
However, the strength in the currency will not be able to cap gains in international commodity prices as strong economic data points towards recovery in the US, the world’s largest economy. Gold prices will gain back due to risk appetite in the financial markets. However, a trigger to the yellow metal prices would be capped by a simultaneous increase in the dollar.
