European markets traded on a positive note today as Greek Prime Minister Lucas Papademos increased hopes for a deal to be reached with the private investors this week in order to avoid a default.
Lucas Papademos stated that he expects to reach a deal both with private creditors over restructuring 200 billion Euros of debt and on conditions tied to a second bailout by its international lenders by the end of the week.
The European Union (EU) leaders also agreed that a 500 billion Euro European Stability Mechanism will enter into force in July in order to support indebted countries.
Spot gold prices rose around 0.6 percent today on account of weakness in the US dollar, as a weaker dollar makes dollar-denominated commodities cheaper for the holders of the other currencies. The yellow metal hit an intra-day high of $1744/oz and was hovering around $1740/oz till 4.30 pm IST today. MCX Gold February contract rose around 0.2 percent till 4.30 pm IST, as further gains were resisted on account of a stronger Rupee.
Taking cues from rise in gold prices along with dollar weakness, spot silver also witnessed gains of more than 1 percent today. Silver being an industrial metal also took cues from upside in base metals. The white metal touched an intra-day high of $33.92/oz and was trading at $33.82/oz till 4.30 pm IST.
US consumer confidence index is expected to increase up to 68.2-mark in January from the previous level of 64.5 in December. The base metals complex traded higher ahead of this economic data from the US with zinc being an exception. Additionally, upbeat sentiments in the markets coupled with weakness in the US dollar also acted as a supportive factor.
Nymex crude oil prices increased by 0.5 percent today, on the back of supply concerns from Iran coupled with a weaker dollar. However, sharp gains were capped due to expected rise in US crude oil inventories. Prices were trading around $99.25/bbl after touching an intra-day high of $99.57/bbl till 4:30pm today.
The American Petroleum Institute (API) is scheduled to release its weekly inventories today and crude oil inventories are expected to increase by 1.5 million barrels for the week ending on 27th January 2012.
Outlook
Gold and silver prices are expected to trade higher today on account of a weaker dollar. Silver will also take cues from rise in gold prices and upside in base metals.
We expect base metals to trade with a positive bias today, as economic data from the US is expected to come on a positive note which could boost the sentiments in the global markets. In addition to this, a weaker dollar will also add further upside in prices.
Crude oil prices are expected to trade higher today taking cues from supply concerns from Iran and a weaker dollar. However, expected rise in US crude oil inventories may cap sharp gains in the oil prices.
Courtesy: Angel Commodities
Looking for Trading Advisories? Visit tips.commodityonline.com
