COM: Gold, crude oil gain marginally, Copper positive
Spot Gold prices gained marginally but traded with a sideways bias till 4.00 pm IST today on the back of slight weakness in the dollar. The dollar index weakened after constructive EU summit last weekend. But economic worries in other countries in the Eurozone comprising of Spain, Portugal and Italy is keeping the dollar well above the crucial 80-mark as a safe-haven investment.
Hence, gold prices are lacking trigger as the yellow metal prices usually trade inversely to the greenback. Copper prices traded sideways today till 4.00 pm IST after breaching a two month-high on Monday. The metal prices are awaiting fresh direction for movement as the dollar continued to trade near 81.
The trend of declining inventories of copper continued for a third-consecutive week on the LME, providing support to the prices. Inventories of the red metal declined by 625 tonnes to reach 514,900 tonnes today.
Crude oil prices remained a unchanged on the Nymex till 4.00 pm IST today. OPEC along with the International energy forum is meeting today for planning to announce a joint-action plan to combat price volatility. The decisions would be declared after a couple of discussions amongst the organizations.
Crude oil prices may take a fresh direction through the outcomes of these meetings. However, a major concern for crude oil prices is the rising inventories in the US, the world’s largest consumer of oil. Constant increase in inventories is denting the short term outlook.
Outlook
On the macroeconomic front, the US is expected to announce economic data on consumer confidence and composite housing price index today. Positive updates from the world’s largest economy would boost investor sentiments and provide further direction to the prices of commodities. We expect the dollar to weaken today on the back risk appetite in the financial markets which may help the dollar-denominated commodities to gain.
Crude oil prices would take cues from the movement in the dollar and decisions, if any from the OPEC meetings. Gold prices may gain on the back of weakness in the dollar as a weaker dollar would make gold prices look attractive for holders of other currencies.
