MUMBAI: A steady recovery in prices of industrial commodities continues to be underway as the investors take heart from a slew of strong export data. Further, the dollar continuing to slide against the basket of currencies provided much needed support for commodity counters. Meanwhile, the slow pace of growth in the economy could have a negative influence on prices, which can also mean reappearance of selling at higher levels.
Meanwhile, crude oil prices led the gains in prices. Nymex crude oil futures edged above $74 per barrel after surging more than 3% on Wednesday after the report of buoyant Chinese exports and data that showed a drawdown in US crude inventories. The contract added 5 cents to $74.43 a barrel, after having settled at $74.29 on previous day. The contract had posted gains around 4% shortly before the release of the Fed's so-called Beige Book, an anecdotal account of the economy produced by 12 regional Fed banks.
Many districts described the pace of the recovery as "modest" and the report, albeit mostly seen as positive, warned of potential negative impact from Europe's debt crisis and the oil spill in the Gulf of Mexico.
Meanwhile, OPEC lowered its world oil demand growth forecast by 10,000 barrels per day, to 940,000 barrels per day. That put 2010 world demand at 85.37 million barrels per day or 1.12% more than the previous year.
Gold regained some footing after falling the previous day on comments by Federal Reserve Chairman Ben Bernanke that the metal was sending a different signal in response to inflation.
Spot gold was at $1,226.80 an ounce, down $3.60 from New York's notional close on Wednesday. Gold struck a record at $1,251.20 earlier this week on fears the euro zone's sovereign debt crisis may spread.
Gold's response to inflation is different when compared with other assets and commodities, US Federal Reserve Chairman Ben Bernanke said on Wednesday, prompting bullion investors to lighten positions.
US gold futures for August delivery lost $2.20 an ounce to $1,227.70 an ounce.
London copper dipped 1%, paring the previous session's gains as jittery sentiment emanating from US equity markets undid the bullish mood from positive Chinese export data. The counter has since recovered
Three-month copper on the London Metal Exchange (LME) was last trading unchanged at $6,330 a tonne, having rallied 2.8% in the previous session after Chinese exports grew 50% year on year rise for May.
Domestic commodity futures continue to witness session so far with rupee making quick moves between positive and negative zone.
MCX crude oil futures for June settlement edged lower, after initial spurt in prices gave way to profit taking. The contract was last trading 0.1% lower at Rs 3,499 per barrel after having spent the session between Rs 3,519 and Rs 3,492.
MCX Gold for June settlement contract quoted almost unchanged at Rs 18,787 after spending the session between Rs 18,844 and Rs 18,762 per 10 grams. MCX Silver July settlement contract was trading 0.2% lower at Rs 29,046 per kg, after having opened the session at Rs 29,112.
Base metal maintained soft trend so far. MCX copper for June settlement was trading 0.1% lower at Rs 295.90 per kg. MCX zinc June contract lost 1.7% to trade at Rs 80.65 per kg.
