MUMBAI: Overnight data from the US consumer confidence index, which has slipped to the lowest level since February 2010, continued to have negative repercussions on the financial markets.
Commodity trading started today on a sluggish note. The recovery of the US dollar against the euro was a relief rally.
US crude oil futures reversed early declines, after falling nearly 2% the previous day, ahead of the release of an inventory data. Late Wednesday, crude retreated lower as industry data showed an unexpected rise in US crude inventories due to higher imports.
NYMEX crude for September delivery was up 7 cents at $77.57 a barrel, after dropping to as low as $76.88 earlier. It settled down $1.48 at $77.50 on Tuesday after consumer confidence plunged to its lowest level in five months, prompting investors to sell off riskier assets including oil and equities. Oil touched $79.69 on Tuesday, the highest front-month crude price since $80.39 struck on May 6.
After crude futures settled, the American Petroleum Institute (API) said in a weekly report that crude supplies rose 3.1 million barrels last week. The API said gasoline stocks rose by 877,000 barrels and distillate stocks by 407,000 barrels.
Gold steadied this morning after falling 2% to a near three-month low the day before, when a bigger-than-expected drop in consumer confidence and an option expiry prompted heavy selling.
Spot gold was at $1,164.60 an ounce, up 0.5% from late New York levels of $1,159.65 per ounce. Spot gold fell to a low of $1,157.65 an ounce on Tuesday, the cheapest price since May 5. Bullion also posted its biggest one-day decline since July 1.
The euro and sterling also fell on Tuesday. Euro-priced gold fell to its weakest since May 4, while sterling-denominated bullion reached a three-month trough.
The world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, said its holdings fell to 1,300.83 tonnes by July 27, down 0.91 tonnes from the previous business day.
Base metal counters came under pressure on Tuesday, but are expected to trade steady in today’s session. Shanghai copper is seen trading steady, after London copper snapped a week-long rally on gloomy consumer confidence data.
Three-month copper on the London Metal Exchange (LME) added $75 to $7,165 a tonne, even as a disappointing consumer confidence reading cast doubts on the economic recovery prospects.
July US consumer confidence plunged to its lowest since February, as worries about the job market persisted. Investors are watching the data for US durable goods orders in June due today, which may shed some light on the health of the world’s largest economy.
The euro eased from a 11-week high against the US dollar, but strength is expected to remain in the short term on a surprisingly resilient euro zone economy and concerns over the faltering recovery of the US economy.
LME copper stocks continued to decline, down another 2,475 tonnes to 413,800 tonnes on Tuesday, the lowest since mid-November 2009.
Domestic commodity counters traded mixed despite strong global cues. The rupee scaled to a 2-week peak against the US dollar, which kept a lid on commodity prices.
MCX crude oil futures for August moved in a narrow range amidst a steady tone. The domestic contract was last trading 0.03% higher at Rs 3,625 per barrel after trading between Rs 3,632 and Rs 3,616.
Precious metals counters maintained soft tone so far. MCX Gold contract for August settlement was last trading at Rs 17,726 after having spent the session between Rs 17,791 and Rs 17,711 per 10 grams. MCX Silver September settlement contract was trading 0.04% weaker at Rs 28,448 per kg, after having opened the day at Rs 28,452.
The base metal counters maintained a steady trend, tracking global metal prices. MCX copper for August settlement added 0.6% to Rs 333.70 per kg. MCX zinc July contract traded 1.9% higher at Rs 90.15 per kg.
