Spot Gold prices came under pressure today and slipped to levels around $1,230/oz till 4.00pm IST as a rise in risk appetite in the financial markets led to decreased demand for the yellow metal as a safe-haven. Gold prices slipped despite weakness in the US Dollar Index (DX) as expectations of strong exports data in China led to revival in investor sentiments today. The yellow metal will continue to take cues from the risk sentiments in the financial markets.
Copper prices gained more than 2% on the LME till 4.00pm IST as expectations of forthcoming robust economic data releases from China helped lift sentiments. Official figures of Chinese exports data is expected to be released tomorrow and the data is forecast to show a rise of 50% in exports in May from a year earlier. If the data comes in as per expectations then the surge in external demand will indicate that the risk of a Chinese economic downturn is very small. On the back of this copper prices will trade with an upside bias today.
Crude Oil prices traded in the positive territory till 4.00pm IST as weakness in the DX coupled with expectations of a decline in US crude oil inventories bolstered prices. The US Energy Department is expected to show a decline in inventories and this is leading to optimism that fuel demand in the world’s largest oil consumer may rise.
Outlook
The US is expected to announce data on wholesale inventories later in the evening today. However, a close watch today is Ben Bernanke’s testimony before the House budget committee. The Fed chairman had said in the beginning of this week that the central bank will raise interest rates before the economy returns to full employment.
But the major upside trigger to base metals will be the forecast of strong growth in Chinese exports in May. Copper prices could rise on the back of expected positive Chinese exports data which is to be released tomorrow. Crude oil prices will take cues from the inventory data release today by the US Energy Department which is expected to show a decline. But gold prices could come under pressure today as a rise in risk appetite will lower demand for the yellow metal as a safe-haven.
