BULLION
Gold prices rose towards a seven-week high on the penultimate trading day of the week due to less than impressive economic data from US. The unemployment claims in the US rose more than expected last week affirming the idea of slowing economic recovery. Fears of economic slowdown sparked buying interest in the yellow metal as gold is considered a safe haven investment.
In addition, the weakness in the US currency against its major counterparts also persuaded the investors to go for gold. Concerns over the prospect of sluggish growth have raised investors' appetite for bullion as a haven from uncertainty in the wider markets.
This has been reflected in a rise in holdings of the world's largest gold exchange-traded fund. New York's SPDR Gold Trust said its holdings rose just under 1 tonne to 1,295.516 tonnes, their highest since July 27, on Wednesday.
ENERGY
Crude oil prices fell, erasing slight gains from earlier during the day, as weaker than expected US data and higher inventories of crude oil products weighed the market down. Rising jobless claims in the US, the largest consumer of crude oil, and an unexpected fall in Philadelphia Fed Index lead to fears that the economy is slowing, resulting in it reducing the prospective demand for the commodity.
Crude oil prices also shrugged the dollar weakness, which otherwise lends support to the counter. A weaker US dollar renders commodities denominated in the currency dearer to investors. Crude oil prices have also maintained tight correlation with the stock markets recently and it has certainly honored the relationship on Thursday with it falling alongside stocks. The Dow Jones Industrial Average of US traded more than 150 points down when trading concluded at the MCX.
Natural gas prices gave away initial gains and slid in spite of the data released by the Energy Information Administration, which showed a lesser than expected build in inventories. U.S. Energy Information Administration reported that natural gas inventories grew by 27 billion cubic feet, which fell short of consensus estimates for a build of 31 billion cubic feet. Natural gas market remains to be oversupplied and the gains that were witnessed were mere market jitters.
Natural gas in U.S. storage remains at high levels. Natural gas in U.S. storage for the week ended Aug. 13 stood at 3.012 trillion cubic feet, 7% above the five-year average. Meanwhile, government forecasters are monitoring a cluster of thunderstorms over the western Caribbean Sea.
The National Weather Service gives the system a low chance of tropical cyclone formation. Storm activity could go on and threaten supplies from the U.S. Gulf of Mexico, an energy-rich region representing about 11% of domestic gas output.
BASEMETALS
Base metals prices also ended in red as falling stock markets and weaker than expected data from US, the second biggest consumer of copper, weighed the sentiments down. Initial unemployment claims unexpectedly rose by 12,000 to 500,000 in the week ended Aug. 14, the Labor Department said Thursday. Economists had expected to see a decline of 4,000.
Whereas, the Philadelphia Fed index was weaker than expected and the Conference Board's index of leading indicators rose 0.1% in July, less than the 0.2% gain expected. However, demand signals remains with falling inventories at the London Metal Exchange.
