Spot Gold prices were trading on a flat note today after rallying in the previous session. The yellow metal prices touched a record high of $1274/oz on Tuesday. Gold prices gained as global investors are expecting the US Federal Reserve to further enhance steps to support the stalling recovery. A likely move expected is the quantitative easing program to the tune of 1 trillion dollars of the Federal Reserve in November.
The Asian equity markets traded on a mixed note today. However, the domestic equities stayed firm today, posting strong gains. Economic data from the UK today indicated that jobless claims in the country increased by 2,300 in August. The European equity markets were trading in the red on the back of this unfavorable economic data.
Copper prices declined more than 0.5% on the LME till 3.45 pm IST today. The red metal prices were trading slightly below $7600/tonne in the afternoon trade today. Copper prices took cues from the movement in the US Dollar Index (DX). The DX appreciated around 0.4% in the Asian trade today and this factor exerted pressure on the copper prices. Copper inventories declined today after a slight increase in the previous session. Inventories declined by 1025 tonnes to reach 389,500 tonnes today.
Crude oil prices declined more than 1% on the Nymex till 3.45 pm IST today on concerns over rising inventories in the US. The American Petroleum Institute (API) reported yesterday that US crude oil inventories increased by 3.33 million barrels to 362 million barrels for the week ended September 11. Markets had anticipated a decrease in inventory levels by 2.3 million barrels. Moreover, strength in the DX also added pressure on the crude oil prices today. Another storm, Karl has emerged near the Mexico region but the National Hurricane Center (NHC) has yet not declared it as a hurricane.
Outlook
On the macroeconomic front, a host of economic data comprising of industrial production, empire state manufacturing index, etc. are scheduled for release today. Data is expected on the positive side and this may help in reviving market sentiments. However, copper prices may not witness sharp upside on the back of weak demand from China.
Chinese markets will remain closed for a long holiday in the next week on account of autumn festival. Hence, investors avoid taking fresh positions, thus hurting prices. Crude oil prices will take cues from the inventory data to be released by the US Energy department later in the evening around 8.00 pm IST today. Moreover, any major news on the hurricane front would provide some respite to prices. Gold prices are expected to gain as latest indications of the US Federal Reserve pumping around 1 trillion dollars into its economy would decrease the appeal of the DX.
