Spot Gold prices continued to gain and were hovering around $1230/oz till 4.00 pm IST today. However, the yellow metal prices were trading in the red on the MCX. Risk appetite in the financial markets is leading to decreased demand for gold as a safe-haven today. The Asian as well as the European markets were trading in the green in the afternoon trade. The dollar index (DX) - a gauge against a basket of currencies weakened sharply today on the back of risk appetite in the financial markets.
Copper prices gained more than 2% on the LME till 3.45 pm IST today taking cues from the positive sentiments in the financial markets and the weakness in the DX. The DX lost more than 1% this afternoon and this factor helped the copper prices to march northwards. Earlier the red metal prices had rallied in the last week on the back of positive economic data from China. Copper inventories declined by 1,825 tonnes at the LME warehouse today.
Crude oil prices started the week on a positive note, gaining more than 2% on the Nymex till 4.15 pm IST today. The weaker DX made the commodity prices more attractive for holders of other currencies. Another factor that is supporting the crude oil prices is the declining inventories in the US, the world’s largest consumer. The US energy department reported last week that crude oil inventories declined by 1.8 million barrels as against forecasts of 1.1 million barrels. This was the second consecutive inventory decline in the US, indicating that the demand for the commodity is picking up.
Outlook
There is no major economic data to be released from the US today. Metal prices will continue to take cues from the sentiments in the financial markets. The DX is expected to remain weak today and this factor will help the dollar-denominated commodities to gain. However, the Chinese markets will be closed from 14th-16th June, (Monday to Wednesday) on account of holiday for Dragon Boat Festival.
Crude oil prices will continue to trade with a positive bias as weakness in the DX and falling inventories will support prices. Copper prices will also rise as the weaker DX will make the red metal prices favorable for holders of other currencies. Gold prices would be capped as risk appetite in the markets would decrease demand for the yellow metal as a safe-haven.
