Spot Gold prices were trading in the green around $1170/oz till 3.45 pm IST today. Lower prices are attracting investors towards the yellow metal. Gold prices touched a 12-week low of $1156 on Wednesday, but since then gained some relief on the back of bargain hunting by investors.
However, sharp gains in the gold prices were capped today on the back of strengthening in the US dollar index (DX). The DX- a gauge against a basket of currencies was trading around 81.92 till 3.45 pm IST on the back of weak sentiments in the global financial markets.
Copper prices declined more than 0.5% on the LME till 3.45 pm IST today and the red metal prices were hovering around $7215/tonne around the same time. The strength in the DX made copper prices look expensive for the holders of other currencies. Profit booking was also witnessed ahead of the weekend which exerted pressure on the red metal prices. Moreover, copper inventories increased by 1975 tonnes today, a second consecutive gain at the LME warehouse stocks.
Crude oil prices also came under pressure today and were trading around $77.81/bbl till 3.45 pm IST. The strength in the DX made the dollar-denominated commodity look unattractive for holders of other currencies. Crude oil prices had gained more than 1.5% in the previous session on the Nymex. The US Energy department reported on Wednesday that crude oil inventories increased by 7.3 million barrels in the week ending July 23rd. Increasing inventories in the US is denting the outlook for the crude oil prices.
Outlook
On the macro-economic front, a host of economic data is expected to be released by the US authorities today. Advance GDP figures, employment cost index and consumer sentiment remain a close watch. China’s chief currency regulator said that China has surpassed Japan to become the second largest economy of the world. This will positively influence the commodity prices, especially metals and crude oil, as the Asian tiger is amongst the top consumers of these commodities.
Global financial markets are expected to trade with a negative bias today ahead of the weekend. This will lead to higher demand for the DX. The stronger DX will exert pressure on the commodity prices, including copper and crude oil. Gold prices would also witness some pressure on the upside as strength in the DX will make the yellow metal prices look expensive for holders of other currencies.
Courtesy: Angel Commodities
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