MUMBAI: A slight recovery is in progress in commodity futures, aided by a softer tone in the US dollar against the euro and investors are looking beyond the recent spate of economic data that spooked the markets.
Meanwhile, investors smelt positive outcome from the European Bank stress test that led the euro to a seven-week high against the US dollar – it breached the key technical resistance level – and prompted some investors to bet against the single currency and buy.
US stocks logged their best one-day gain in about six weeks on Wednesday and the S&P 500 broke above a major resistance. This brought back positive sentiment in the commodity markets.
NYMEX crude oil rose this morning, approaching a one-week high near $75, after an industry report showed US inventories plunged last week, adding to price gains triggered by soaring equity markets amidst earnings optimism.
West Texas Intermediate (WTI) crude for August rose as much as $1.30 to $75.10 a barrel and was up 57 cents at $74.64 on the New York Mercantile Exchange. Oil prices rose nearly 3% to touch $74.92, the highest intraday price since July 1, snapping six straight sessions of losses on Wednesday.
Crude inventories tumbled by 7.3 million barrels last week, the American Petroleum Institute (API) reported late on Wednesday, more than three times the expected drop.
Stockpiles fell after Hurricane Alex forced some producers in the US Gulf to close loading terminals that send most of their output to refiners. Gasoline stocks fell 191,000 barrels, the API said, in line with analysts' expectations, while distillates, including heating oil and diesel, fell 1 million barrels, contrary to a poll forecast for a 1.4 million-barrel gain.
Government statistics from the Energy Information Administration (EIA) on oil inventories and demand followed on Thursday.
Gold rose further to hold above $1,200 an ounce on Thursday as equities rebounded and a recent fall to a six-week low spurred strong physical buying, while holdings on the ETF were unchanged.
Spot gold added $4.75 to $1,206.55 an ounce. It had dropped to its weakest since May 25 at $1,185.05 on Wednesday before regaining strength. The lukewarm attitude to gold reiterated by the State Administration of Foreign Exchange on Wednesday is unlikely to have long-term repercussions in bullion markets.
The world's largest gold-backed exchange-traded fund SPDR Gold Trust said its holdings were unchanged at 1,316.48. The holdings hit a record at 1,320.44 tonnes on June 29.
After ending strong on Wednesday, base metal counters continue to make merry on a fresh impetus found from firm equities. Shanghai copper is moving higher, chasing gains in London spurred by the US dollar's slump and a rally on Wall Street ahead of what appears to be an upbeat corporate earnings season.
Three-month copper on the London Metal Exchange (LME) rose $71.75 to $6,711.75 a tonne. It was last trading marginally softer at $6,680 a tonne.
The surge in the euro and US stocks helped copper reverse losses in the previous session as investors looked past data showing slower non-manufacturing sector growth and an unexpected fall in German manufacturing orders.
Domestic commodity markets witnessed a steady uptrend in prices following the strong cues from global markets. MCX crude oil futures for July added over 1% at Rs 3,510 per barrel after spending the session between Rs 3,513 and Rs 3,475.
MCX Gold contract for August settlement retraced higher. The contract was last quoting at Rs 18,458 after having spent the session between Rs 18,466 and Rs 18,393 per 10 grams. MCX Silver September settlement contract was trading 0.4% up at Rs 29,033 per kg, after having opened the session at Rs 28,950.
Base metal counters made steady gains following the global markets. MCX copper for August settlement was up a tad at Rs 314.20 per kg. MCX zinc July contract added 0.06% at Rs 86.50 per kg.
