Spot Gold prices were trading in the positive territory today till 4.00 pm IST today, as the dollar index weakened, albeit marginally, paving way for the yellow metal prices to regain the lost ground. However, the greenback continued to trade above 80-mark as investors are awaiting the FOMC meeting later today in the evening.
The 16-country euro currency gained some support on the downside today after depreciating against the dollar yesterday after the European ministers avoided providing financial assistance to the debt-laden Greece.
Copper prices gained more than 1% on the LME today on the back of a weaker dollar coupled with decreasing inventories. The prices of the red metal recovered back after touching a two-week low of $7270 on Monday, whereas the inventories decreased for a 10th session in a row. Inventories decreased by 3150 tonnes to reach 528,050 tonnes on the LME today.
Moreover, positive sentiments in the equity markets also helped the metal prices to gain. However, sharp increase in the prices were capped on the upside on Chinese concerns that the government may increase interest rates to tame inflation, which may slow down the growth rate and eventually will affect demand from the world’s largest consumer of metals.
Crude oil prices remained a little unchanged on the Nymex till 4.00 pm IST as investors wait for fresh news to take further direction. Concern of excessive supply with the major consumers is putting the crude oil prices under pressure. The OPEC is scheduled to meet tomorrow in Vienna to discuss on the production policies of the member countries to control the prices and supply.
Outlook
Today, the US is expected to announce a host of economic data on building permits, housing starts and import prices. However, investors are wary of the FOMC meeting later in the evening which may provide further direction to the commodity prices. The Federal Reserve is expected to continue to keep the interest rates unchanged for a further period.
Metal prices today may trade with a positive bias taking cues from the movement in the dollar and risk sentiments in the financial markets. However, sharp gains may be capped on concerns of Chinese monetary policy and concerns of Greece’s crisis. Crude oil prices would take cues from inventory data to be released by the API today. Gold prices may gain if the dollar weakens.
Courtesy: Angel Commodities
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