Spot Gold prices were little changed to its previous close but were trading in the green till 4.15 pm IST today. The weakness in the US dollar index (DX) in the afternoon trade supported the yellow metal prices. The DX was trading in the red at 82.38 against a basket of currencies in the afternoon trade. The Asian equity markets traded on a mixed note today. European markets were mostly on a flat note ahead of the key stress test results to be released by the European Central bank today.
Copper prices remained unchanged to its previous close of $7030/tonne on the LME till 3.45 pm IST today. Profit booking at the higher levels capped further gains in the red metal prices. Moreover, the trend of declining inventories ended on the LME warehouse today and this factor also exerted pressure on the upside. Inventories increased by 3,125 tonnes to reach 419,650 tonnes today. Copper inventories had declined for 25 consecutive sessions on the LME till yesterday.
Crude oil prices declined, albeit marginally till 4.15 pm IST today mainly on the back of profit booking at the higher levels. Crude oil prices had gained a stunning 3.5% on the Nymex to close at $79.30/bbl yesterday. On the hurricane front, tropical storm Bonnie was on track towards the Gulf of Mexico region, as per data provided by the US National hurricane Center. The Gulf of Mexico is one of the largest producing areas of the US, accounting to around 31% of US oil output and 10% of natural gas production.
Outlook
There is no major economic data to be released from the US today. However, a close watch for today is the bank stress tests scheduled for release later in the evening today. Commodity prices are expected to trade on a volatile note taking cues from the stress test results and risk sentiments in the financial markets.
Positive results would boost risk appetite, but if the results prove worrisome, it can lead to risk aversion in the global markets and demand for safer investments like gold and the US dollar index (DX) would re-emerge. Unless negative sentiments arise, copper and crude oil will trade with a positive bias on the back of the weaker DX. Gold prices would gain marginally in the evening session as a weaker DX makes the yellow metal prices attractive for holder of other currencies.
