MUMBAI: Industrial commodity counters were back in business as stronger equities and a firm euro made risk-taking attractive. However, increased risk appetite spelt doom for gold, which once again lightened in today’s trade.
US crude oil futures were steady above $77 a barrel as market players eyed the release of a slew of statistics due out later in the day. NYMEX crude for September delivery was up a tad at $77.62 a barrel. The August contract, which expired on Tuesday, settled up 90 cents at $77.44 a barrel for the day as Wall Street's major indices turned positive and a tropical weather threat supported prices.
Crude inventories fell less than expected last week as refinery runs rose, according to weekly data from the American Petroleum Institute (API) on Tuesday. Crude stockpiles fell by 241,000 barrels in the week to July 16, the API statistics showed, compared with expectations of a 1.4 million-barrel draw. The US Department of Energy will publish its oil statistics later on Wednesday.
Gold was steady after rising 1% on the previous day on technical buying, but a drop in ETF holdings and rising stock markets could encourage some investors to shift their money out of bullion.
Spot gold stood at $1,189.65 an ounce. Bullion had dropped to a two-month low at $1,175.35 on Tuesday before rebounding sharply to above $1,190 an ounce. US gold futures for August delivery barely moved at $1,191.9 an ounce.
The world's largest gold-backed exchange-traded fund, SPDR Gold Trust, said its holdings fell nearly 0.5% to 1,308.13 tonnes by July 20 from 1,314.21 on July 15. The holdings hit a record at 1,320.44 tonnes on June 29.
Premiums for gold bars have strengthened after declines in bullion prices triggered buying from jewellers across Asia.
Base metal counters traded firm backed by positive data and shrinking inventories that point to an improved demand outlook. Three-month copper futures on the London Metal Exchange (LME) is currently trading unchanged at $6,675 a tonne, after adding a 2% gain in the previous session.
New home construction hit its lowest level in eight months in June, but an unexpected 2.1% rise in applications for building permits offered hope that home construction activity could pick up in July.
A continued decline in copper inventories also suggested firm demand for the industrial metal, with LME copper stocks falling another 3,250 tonnes to 419,600 tonnes, down about 24% from levels in mid-February.
In terms of production, BHP Billiton, the world's biggest miner, said its fourth-quarter copper output dropped 5% from a year earlier with the company forecasting its Olympic Dam mine to return to full production in the current quarter. The huge Australian mine had been running at only about a fifth of capacity since a mining accident in October.
Commodity counters were trading in a narrow range following the global trend. The rupee bounced off a 6-week low against the US dollar and this checked commodities prices.
MCX crude oil futures for August moved in a narrow range. It was last trading 0.1% higher at Rs 3,675 per barrel after spending the session between Rs 3,683 and Rs 3,663.
Precious metal counters were trading choppy following uncertainty in the currency markets. MCX Gold contract for August settlement was last trading at Rs 18,330 after having spent the session between Rs 18,337 and Rs 18,316 per 10 grams. MCX Silver September settlement contract was trading marginally higher at Rs 28,652 per kg, after having opened the day at Rs 28,626.
Base metal counters have maintained steady tone following the global cues. MCX copper for August settlement edged up to Rs 314.65 per kg. MCX zinc July contract traded almost flat at Rs 87.10 per kg.
