MUMBAI: Last week’s sluggish trend in US economic data continues to apply pressure on commodity futures. While, the flurry of report suggests economic recovery in US – the worlds largest economy – remains a big concerns, little support was extended by currency movement.
The greenback has once against strengthened against euro and other major currency, in the process reduced commodities investment appeal. Meanwhile, the markets focus has shifted to earnings cue from US corporate followed by housing data and GDP data from.
Apparently, commodity prices maintained soft tone so far. NYMEX crude oil prices fell below $76 a barrel, extending the previous session's decline, amid concerns about the US economic outlook after data showed consumer sentiment fell for the third month to a near one-year low.
NYMEX crude for August delivery slid to $75.50 a barrel in early Asian trade. It has since recovered and was last trading 6 cents higher at $76.06. The contract settled down 61 cents at $76.01 a barrel on Friday, closing the week 8 cents lower than the previous week.
Meanwhile, BP Plc's stricken oil well showed no sign of leaking on Friday after a new cap stopped crude flow into the Gulf of Mexico. But the government and BP appeared at odds on Sunday about the need to stop a test that has halted the flow of oil as relief well moves closer to sealing the massive leak.
On the weather front, two low pressure systems, one in the northern Gulf of Mexico and one just east of southern Nicaragua in the Caribbean Sea, had a low 10% chance to become the season's next tropical cyclone during the next 48 hours, the US National Hurricane Center (USNHC) forecast Friday.
Gold extended losses after falling to its lowest in more than a week in the previous session, as low inflation expectations outweighed any upside sentiment from weaker equity markets. Gold was down $5.80 to $1,186.50 per ounce versus Friday's nominal close of $1,193.10.
Gold fell on Friday as weak inflation data and heavy inflows to government bonds from the equity market prompted funds to sell. Gold last week price action remained down and ended the week with a loss of nearly 2%
Analysts are pessimistic about gold prices for this week. Correction in gold prices is likely to continue with next immediate objective for prices seem to be $1,158.30. An intraday breach below $1,183.80 would be negative and would attract sell off to test next support at $1,176.50, $1,169.60 and $1,163.40 technical analysis suggest.
Base metal counters have edge higher this morning as traders resorted to bottom fishing. Metal price have been on the downward spiral after US economic data and earnings turned more negative in the previous session, sending copper sliding 3%.
Three-month copper on the London Metal Exchange (LME) rose $46 to $6,530 a tonne, having fallen 2.9% in the previous session to end the week 4% down.
Looking ahead, housing data looks likely to dominate. First out of the traps is the NAHB housing index due later today and expected to slip to 16 in July from 17 in the previous month.
Domestic commodity counters maintained choppy trend tracking domestic equities. However, the rupee falling to two-month low against the US dollar prevented commodities from sliding sharply lower.
MCX crude oil futures for July maintained firm trend ahead of expiry today. The contract was last trading 0.5% higher at Rs 3,581 per barrel after spending the session between Rs 3,597 and Rs 3,560.
Precious metals counters were still quoting weaker. MCX Gold contract for August settlement was last trading at Rs 18,278 after having spent the session between Rs 18,336 and Rs 18,272 per 10 grams. MCX Silver September settlement contract was trading 0.4% lower at Rs 28,680 per kg, after having opened the day at Rs 28,739.
Base metal counters stayed strong tracking global metal prices. MCX copper for August settlement was quoting 0.5% higher at Rs 307.80 per kg. MCX zinc July contract added 1% to trade at Rs 84.50 per kg.
