European equities are trading lower on the back of US Fed Chairman Ben Bernanke statement that stimulus measures declared by the Ferial Reserve will not be able to solve the US fiscal cliff issue. Asian markets ended on a mixed note and US stock futures are trading on a flat note.
Spot gold prices declined 0.9 percent owing to worries amongst market participants over pessimistic statements by the US law makers that the fiscal cliff issue might not be resolved due to differences amongst them, despite announcement of stimulus measures yesterday. Strength in the DX also exerted downside pressure on the gold prices. Depreciation in the rupee however, cushioned sharp fall in the gold prices on MCX.
Taking cues from fall in gold prices along with downside in the base metals complex, Spot silver prices declined 2.15 percent today. Worries over US fiscal cliff weighed on the market sentiments thereby creating risk aversion amongst participants. This resulted in strength in the DX which exerted downside pressure on the white metal prices. In the domestic markets prices are trading around Rs. 62,052 per kg till 4:30 p.m today. Depreciation in the rupee cushioned fall in the prices
The base metals pack traded on a negative note on account of weak global market sentiments along with mixed LME inventories. Strength in the DX also added downside pressure on the base metal prices. Copper, the leader of the base metals group declined 1.18 percent as a result of rise in LME Copper inventories by 0.3 percent coupled with weak global market sentiments created by pessimistic statement by the Fed Chairman Ben Barnanke. A stronger DX also exerted downside pressure on the red metal prices. Copper prices on MCX traced the international prices and are trading at Rs. 445.80 per kg till 4:30 p.m.
Nymex crude oil prices declined 0.6 percent today taking cues from unresolved issue of US fiscal cliff. Also Fed Chairman statement that stimulus measures declared won’t be sufficient to solve the issue acted as a negative factor for the oil prices. Strength in the DX further added more pressure on the crude oil prices.
In the evening session we expect precious, base metals and crude oil prices to trade with a bearish note taking cues from negative statement by the Fed Chairman Ben Barnanke that monetary stimulus declared yesterday cannot offset the US fiscal cliff issues of the nation. Thus, risk aversion in the global markets may result into improved demand for the low yielding currency that is US Dollar Index.
Strength in the DX might exert downside pressure on the commodities. However, some upside might be witnessed if economic data from the US comes on a favorable note thereby rise in the risk appetite.