Spot Gold prices declined marginally till 4.00 pm IST today, as the dollar remained a little unchanged from yesterday’s closing prices. The strength in the greenback kept the prices of the yellow metal under check. The dollar continued to remain strengthened ahead of the key economic data on unemployment claims and trade balance to be released by the US authorities later today.
Financial markets across the world are reflecting mixed sentiments with no clear direction of the prices. This factor is also influential in keeping the dollar strong as investors are flocking towards the greenback as a safe-haven investment and making gold prices less attractive for holders of other currencies.
Copper prices continued to remain under pressure on the LME till 4.15 pm IST, trading below $7500 on the back of increasing concerns that China may resort to monetary tightening which may affect the prices of metals on lack of demand from the world’s largest consumer. China’s consumer inflation increased by 2.7% in February which has led to concern that the central bank may increase interest rates to curb inflation. Moreover, the strength in the dollar also weighed on the prices of the red metal. However, prices were underpinned by good inventory report. Inventories of the copper declined on the LME today by 2,525 tonnes to touch 535,650 tonnes. Inventories of copper are decreasing continuously this week which are supporting the prices from downside.
Crude oil prices gained marginally today till 4.00 pm IST today as the halt in the dollar rally cushioned the prices. The inventory report yesterday by the US Energy department indicated that inventories rose in US last week, but were less than forecasts and previous increases. This provided some support to the prices but sharp trigger in the prices were capped on the upside on the back of rising concerns of China increasing its interest rates to control inflation and real estate prices. China is the second largest consumer of crude oil in the world.
Outlook
Today, the US is expected to announce economic data on unemployment claims and trade balance. Unemployment claims had decreased last week in the world’s largest economy boosting investor sentiments. If the data this week continues to be favorable, it may help prices of dollar-denominated commodities to move upwards. However, sharp increase in the metal and crude oil prices may be capped on the upside if China increases interest rates. Gold prices will take cues from the movement in the dollar. If the dollar strengthens, gold prices may come under pressure.
Courtesy: Angel Commodities
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