Spot Gold prices started the week with a positive note today after falling drastically in the last week. The yellow metal prices were trading at $1183/oz till 4.40 pm IST today. However, gold prices retreated from an intra-day high of $1190 as the dollar rebounded strongly. The dollar index which measures its performance against a basket of currencies strengthened back after the European markets fell off after opening in the green. This is reflecting that investors are still concerned over the ongoing crisis in the Eurozone.
Copper prices gained today and were trading at $6881/tonne on the LME till 4.40 pm IST. However, sharp gains in the red metal prices were capped on the upside on the back of a stronger dollar. Copper prices were supported on expectations of China easing its monetary measures in order to support growth amid global financial crisis. Declining inventories at the LME warehouse also supported the copper prices.
Crude oil prices faced pressure from the dollar and were trading in the red on the Nymex till 4.45 pm IST today. The commodity prices had gained on Friday taking cues from the movement in the dollar. However, investors are still concerned over the economic issues in the Eurozone. The ongoing economic concerns in the Eurozone is leading to concern that the demand for crude oil may decrease.
Outlook
On the macroeconomic front, the US is expected to announce economic data on existing home sales today. Forecasts indicate that the home sales are set to increase in the world’s largest economy. However, global markets still remain choppy as the economic issues in the Eurozone persist.
Commodity prices including copper and crude oil will take cues from the movement in the dollar. The greenback is expected to remain strengthened as economic concerns would lead to higher demand for the low-yielding dollar as a safe-haven investment. Gold prices will be capped on the upside as the yellow metal usually trades inversely to the greenback.
