European markets traded lower today as investors are focusing on the outcome for the Federal Open Market Committee meeting.
Additionally, Ericsson and Novartis posted earnings that missed estimates. Ericsson, the world’s largest wireless networks producer, declined 13 percent after reporting fourth-quarter net income, while Novartis, Europe’s biggest drug maker by sales, declined by 3.6 percent.
Spot gold prices retreated from its earlier gains and came under pressure today, mainly on account of a stronger dollar and mixed sentiments in the global markets. The yellow metal touched an intra-day low of $1652/oz and was trading at $/1653oz till 4.30 pm IST. On the MCX, Gold February contract dropped by 0.6 percent and was hovering around Rs27,220/10 gms till 4.30 pm IST today.
Silver prices declined around 0.4 percent today, taking cues from fall in gold prices, a stronger dollar and downside in base metals. The white metal touched an intra-day low of $31.72/oz and was trading at the level of $31.80/oz till 4.30 pm IST. MCX Silver March contract slipped around 0.8 percent and touched a low of Rs54,866/kg till 4.30 pm IST today.
Strength in the US dollar coupled with fall in the European equities acted as a negative factor for the base metals on the LME today.
However, depreciation in the Indian Rupee resisted further losses on the domestic bourses. Copper declined around 0.7 percent and touched an intra-day low of $8302/tonne till 4.30 pm IST. MCX Copper February contract dropped around 0.4 percent and was trading at Rs420/kg till 4.30 pm IST today.
Nymex crude oil prices declined by 0.7 percent today, taking cues from expected of rise in US crude oil inventories coupled with a stronger dollar. Additionally, mixed sentiments in the global markets also acted as a negative factor for oil prices. Crude oil is trading around $98.30/bbl after touching an intra-day low of $98.18/bbl till 4.30pm IST. On the MCX, oil prices declined by 0.4 percent and were hovering around Rs4955/bbl till 4:30pm IST today.
The US Energy Department (EIA) is scheduled to release it weekly inventories report today and crude oil inventories is expected to rise by 0.8 million barrels for the week ending on 20th January 2012.
Gasoline stocks are expected to increase by 1.9 million barrels whereas distillate inventories are expected to remain unchanged for the same period.
Outlook
Sentiments in the markets remain uncertain ahead of the FOMC meeting today.
Gold and silver are expected to trade lower today on account of a stronger dollar. Silver will also take cues from fall in gold and base metals prices. But in the later part of the trade, the FOMC statement will provide further cues and any positive development could lead to a reversal in prices.
We expect base metals to come under pressure on account of mixed sentiments in the global markets coupled with dollar strength.
Metals will take cues from further cues from developments in the Federal Reserve’s policy statement today.
Crude oil prices are expected to trade lower today taking cues from expected rise in US crude oil inventories along with a stronger dollar.
However, supply worries from Iran may cushion sharp decline in oil prices.
Courtesy: Angel Commodities
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