MUMBAI: After an early pull-back in prices, commodity futures have once again resumed their downward journey pressured by softer equities and investors looking to exit long positions in commodity.
Meanwhile, euro - the currency to 16 nations group – strengthening past two-month high against the US dollar proved little beneficial for market sentiment that had turned softer since last evening US homebuilder index falling to its lowest level in July.
US crude futures erased early session gain and are seen sliding towards $76 a barrel mark. Markets are looking for data release from the American Petroleum Industry (API) later today and Energy Information Administration (EIA) tomorrow.
Sluggish homebuilder report has not only weighed on market sentiment, but is also tempering the advance in the energy markets.
On the New York Mercantile Exchange, crude for August delivery slipped towards $76 a barrel mark after settling 53 cents higher at $76.54 a barrel, on previous day.
It was last quoting at $76.13 a bbl, down 41 cents. Meanwhile, analysts have pointed out that oil continues to trade in the narrow range of $75.50 to $77.69 for the last few weeks. Hence, next few sessions will be crucial for the commodity.
's President Hugo Chavez, on the other hand, believes that oil prices are still low and suggested that minimum price of $80 per barrel for the South American country's crude would be fair.
Gold extended slide, having dropped to its weakest in two months the previous day, as a firm euro and gains in stock markets spurred selling from speculators. Spot gold traded 0.5% lower at $1,177.90 an ounce as weak housing sentiment reduced the metal's inflation-hedge appeal.
The world's largest gold-backed exchange-traded fund, the SPDR Gold Trust, said holdings were unchanged at 1,314.21 tons. The holdings hit a record 1,320.436 tons in late June.
Copper rose more than 1.5% as the US dollar eased and economic sentiment in top metals consumer improved, offsetting weak macro data in Shanghai’s benchmark stock index jumped 1.6% to break the 2,500 level, defying a cautious tone in other equity markets in Asia.
Three-month copper on the London Metal Exchange (LME) gained $25 to $6,545 a tonne. Other base metal counters were quoting largely higher for the day.
Domestic commodity counters were trending choppy following the global trend. The rupee hitting 6-week low against the US dollar helped commodities to stay in the hunt.
MCX crude oil futures for August maintained firm trend so far. It was last trading 0.6% higher at Rs 3,637 per barrel after spending the session between Rs 3,662 and Rs 3,626.
Precious metals counters were quoting lower following the global cues. MCX Gold contract for August settlement was last trading at Rs 18,226 after having spent the session between Rs 18,273 and Rs 18,191 per 10 grams.
MCX Silver September settlement contract was trading 0.2% lower at Rs 28,510 per kg, after having opened the day at Rs 28,620. The counter erased entire early morning gains due to the steady built-up in selling pressure.
Base metal counters have managed to hold on early gains, however choppy equity session have forced metals cut some of their gains. MCX copper for August settlement was quoting 0.3% higher at Rs 309.45 per kg. MCX zinc July contract added 1.2% to trade at Rs 86.00 per kg.
