Spot Gold prices continued to decline till 3.45 pm IST today, maintaining its downtrend since the last week. The yellow metal prices have lost more than 5% till the end of yesterday’s session after touching a record high of $1265/oz in the last month. The US dollar index (DX) which was trading in the green in the Asian trade today exerted pressure on the yellow metal prices.
The global financial markets tumbled today after posting strong gains in yesterday’s session, reflecting that global economic scenario continues to remain bleak. Weak sentiments in the financial markets increased demand for the DX as a safe-haven investment.
Copper prices lost some part of yesterday’s conquered territory and were hovering around 6515/tonne till 3.40 pm IST today. The stronger DX exerted pressure on the red metal prices. Copper inventories continued to decline at the LME warehouse today, and this factor cushioned sharp downside in the copper prices. Inventories declined by 2,350 tonnes to reach 439,350 tonnes today.
Crude oil prices remained little unchanged to its previous close till 3.45 pm IST today ahead of the inventory data scheduled to be released by the American Petroleum Institute (API). The stronger DX kept the commodity prices under check. Markets are expecting the crude oil inventories to decline around 2.75 million barrels in the last week. The US energy department has delayed its weekly inventory report till tomorrow on the back of Independence Day holiday on Monday.
Outlook
There is no major economic data to be released from the US today. Commodity prices will take cues mainly from the movement in the DX and sentiments in the financial markets today. We expect the DX to remain strong in the evening trade on the back of risk aversion in the financial markets. This factor will exert pressure on the dollar-denominated commodities.
Copper prices will trade with a negative bias in the US session taking cues from the movement in the DX. Crude oil prices will be influenced by the inventory data to be released by the API. Declining inventories would support the prices, but sharp gains would be capped on the back of a stronger DX. Gold prices will also face pressure from the strength in the DX and will trade with a negative bias in the evening session.
