BULLION
Gold prices were trading with losses initially during the session on the penultimate trading day of the week as speculation that deflation will erode the demand for precious metals kept the metal prices subdued. However, the metal bounced back later during the session, completely reversing the losses as better than expected economic data from Europe bettered the risk appetite among investors.
The economic data releases also eased the fears following the dovish comments from the US Fed Chairman Ben Bernanke. Positive sentiments in the commodities complex helped lift the yellow metal on Thursday along with a weak US dollar.
However, the US jobless claims rose unexpectedly and housing numbers dipped less than expected. The investors looked forward to the European bank stress test results that will released later during the day. Analysts opined that if stress tests are not stringent enough or if the results are bad, the European currency will fall against the rest of the currencies.
ENERGY
Crude oil prices also enjoyed gains on Thursday as commodities complex benefited from the losses in the US dollar and the better than expected economic data from the European Union. The prospect of a tropical storm near the Gulf of Mexico has also helped to buoy prices. The National Hurricane Center said a tropical depression or tropical storm advisory will be issued later Thursday morning for a weather system in the southeastern Bahamas.
However, the government report showed a rise in inventories of crude oil and its products, easing worries of falling supplies of the commodity.
Natural gas prices, on the other hand, were trading with losses on Thursday despite a smaller than expected rise in inventories, as pointed out by the Energy Information Administration. Natural gas for August delivery on the New York Mercantile Exchange was trading 5.2 cents, or 1.13%, lower at $4.538 a million British thermal units. Reports also showed hotter than expected weather through out the month.
Meteorologists with the private forecasting firm Commodity Weather Group are predicting above-normal temperatures across most of the country from July 26 to July 30. However, sky high inventories continue to weigh on prices. Gas in U.S. storage for the week ended July 9 stood at 2.840 trillion cubic feet--1.1% below last year's level for the week and 10.7% above the five-year-average.
BASEMETALS
Base metals prices amassed gains on the penultimate trading day of the week as positive economic data from the European Union and the UK offset the dovish stance adopted by the US Federal Reserve Chairman.
Rising equity markets and falling stocks have also contributed towards the positive sentiments in the market. Copper prices have gained for the fourth consecutive session, hitting fresh multi-day highs. The smaller than expected falls in housing numbers have also emboldened the investors to go for riskier assets such as equities and commodities, resulting in it benefitting the red metal.
