Spot Gold prices declined, albeit marginally today after touching an intra-day high of $1242/oz on the Comex. The yellow metal prices touched a record high of Rs 18424/10 gms on the MCX till 5.00 pm IST. Gold prices are on a continuous gain since the last couple of weeks as concerns over Eurozone crisis is getting severe and making investors flock towards safer investments like gold. This is leading to huge demand for gold as a safe-haven investment.
Copper prices were trading in the red till 5.00 pm IST today, but wiped out major intra-day losses as the dollar retreated from a high of above 87. However, the greenback is expected to remain strong which will exert pressure on the red metal prices. Copper inventories increased today at the LME warehouse by 100 tonnes. This was the first increase in the last two weeks.
Crude oil prices were also trading in the red on the Nymex till 5.00 pm IST today as the stronger dollar made the commodity prices less attractive for holders of other currencies. Moreover, concern of rising inventories in the US also weighing on the crude oil prices. The US energy department had reported last week that crude inventories rose by 1.95 million barrels to 362.5 million, the highest in almost a year.
Outlook
On the macroeconomic front, the US authorities are expected to announce economic data on TIC long term purchases and Empire state manufacturing index. Positive data may provide some relief to the investors. However, the metal prices will continue to take cues from the movement in the dollar. The dollar is expected to remain strong today which will make the commodity prices less attractive for holders of other currencies.
Moreover, concern of China adopting to tighten liquidity will also weigh on the commodity prices as the world’s fastest growing economy is facing inflationary issues. Gold prices are expected to trade with a positive bias as the yellow metal is attracting demand in terms of a safe-haven asset. Crude oil prices will trade with a negative bias on concern of rising inventories in the US and the stronger dollar.
