News and Analysis > German ZEW Economic Sentiment fell to 27.1-mark in July > UK’s Consumer Price Index surged to 1.9 percent in June > Investors cautious ahead of Janet Yellen's testimony. European markets are trading on a negative note as German investor confidence declined for a seventh month in July. Asian markets are trading higher and the US stock futures are trading in the red. German ZEW Economic Sentiment fell to 27.1-mark in July from 29.8 levels in June. UK’s Consumer Price Index jumped to 1.9 percent in June from 1.5 percent in May. Spot gold prices continue to trade lower throughout following the overnight losses triggered by profit booking and stronger equities denting the safe haven appeal. However prices have marginally recovered by $4 to trade at $1312/oz. Domestic prices in top buyer China fell to a discount to the global benchmark on Tuesday, from being on par in the previous session, in a sign of weak physical buying. Demand in other parts of Asia was also subdued. Bullion investors were eyeing Federal Reserve Chair Janet Yellen's testimony in a U.S. Senate committee later on Tuesday for signs of when the U.S. central bank would begin increasing interest rates. On the MCX, gold prices are trading higher by 0.54 percent at Rs.27912/10gms. After declining significantly in the previous session Spot silver prices are trading higher taking cues from gold prices. The situation in Ukraine seem to be boiling up again, whereas the weakness in gold prices. On the MCX, silver prices are up by 0.65 percent trading at Rs.45203/kg. Base metals on the LME apart from Aluminium are trading on a negative note today on the back of unfavorable economic sentiment data from Euro Zone. Also, strength in the DX along with rise in risk aversion in the market sentiments exerted downside pressure on prices. MCX base metals traded lower with international trends. LME Copper prices declined by 0.3 percent today on the back of profit booking seen after recent gains. Also, negative economic sentiment data from Germany for seven months in a row exerted downside pressure on prices. However, optimism regarding steady economic growth in the biggest consumer, China restricted sharp fall in prices. On the MCX, copper prices are trading lower by 0.1 percent at Rs.433.50/kg. Oil prices continue to trade lower on lower global refining activity and weaker buying from China. In addition, concerns over global supplies offset the impact of renewed violence in Libya. Investors are watching for U.S. oil inventory reports due on Tuesday and Wednesday. The market is also waiting for China's June growth figures, due on Wednesday, to give a sense of whether the world's second-largest economy and the world's top net oil importer needs further stimulus support. On the MCX, crude prices are trading marginally higher by 0.02 percent at Rs.6048/bbl. Outlook We expect gold and silver prices to trade sideways to lower on account of profit booking coupled with easing concerns about Euro zone reducing the safe haven status Crude prices are expected to trade lower as the low demand from crude consuming nations like US and China on account of low refining activity will be a drag for crude prices. Meanwhile, the API and the EIA inventory report will provide further clues to crude prices. Base metals are likely to trade lower as investors remain cautious ahead of Federal Reserve Chair Janet Yellen testimony in the evening session. Also, mixed economic data from the US will act as a negative factor.

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