BULLION Gold and silver prices seem to have returned to the tune of the conventional market wisdom with the yellow metal erasing some of its earlier gains amidst a rising US dollar. Investors’ speculation that positive US data releases recently and the expectation of a strong payrolls data will help revive the equity markets and reduce the demand for gold, resulting in it weighing on the sentiments and taking prices down. Benchmark U.S. gold futures for August delivery on the COMEX division of the New York Mercantile Exchange closed $12.60, or 1.03 percent, lower at $1,210 an ounce. The stock markets, however, gave away some of its gains after the data release that showed a smaller than expected rise in factory orders of US. Data also showed that non-manufacturing sector grew during the month of May. Nevertheless, the investment demand for the metal shows no weakness as holdings of SPDR, the largest gold backed exchange traded fund, has risen another 0.31 tonnes, rising towards 1268.54 as on Wednesday 2nd May 2010. Crude oil prices have reacted positively to a more than expected slide in inventories as reported by the US Energy Information Administration. Gasoline supplies fell 2.65 million barrels to 219 million barrels, the lowest level this year. With the onset of summer driving season in the US, the demand for gasoline is expected to increase. The EIA also reported that the demand for fuel increased 1.6 percent to 20 million barrels a day, the highest since Jan 30 of 2009. Crude oil for July delivery increased $1.75, or 2.4 percent, to $74.61 a barrel on the New York Mercantile Exchange, the highest settlement since May 12. Stocks of crude oil fell by 1.9 million barrels to 363.2 million barrels. Consumption of all fuels climbed 8.1 percent to 19.7 million barrels a day from a year ago in the four weeks ended May 28, according to the Energy Department. ENERGY Natural gas prices recorded significant gains on the penultimate trading day of the week with forecasts of hotter than usual weather in the major gas consuming regions of US. In addition, the data released by the US Energy Information Administration also showed a lesser than expected build in inventories, signaling a pick up in demand for the commodity. The Energy Information Administration reported Thursday an increase of 88 billion cubic feet in natural gas in storage as opposed to a expectation of a 94 billion cubic feet rise. Natural gas for July delivery rose 9 cents, or 2.1%, to $4.52 per million British thermal units. BASE METALS Base metals prices were hit hard on Thursday despite a recovery in stock markets and US economic data pointing towards growth as a rise in the US greenback enticed investors to weigh the metals down. Copper, the base metals bellwether, fell to the lowest in almost two weeks also struck down by fears of Chinese efforts to curb the activity in the real estate sector to contain the bubble. The fall in Chinese manufacturing PMI has also resulted in emergence of selling pressure. Copper futures for July delivery fell 9.4 cents, or 3.1 percent, to $2.9465 a pound on the Comex in New York, the biggest drop for a most-active contract since May 25. Nickel tumbled 5 percent to $18,675 a ton, after touching $18,546, the lowest level since Feb. 12. Zinc fell 3.2 percent to $1,745, after touching $1,725, the lowest price since July 31.

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