Unemployment rate in the Euro Zone remained steady as expected at 9.9 percent in June. Euro Zone final manufacturing Purchasing Managers' Index (PMI) remained flat at the level of 50.4 in the month of July. Italian monthly unemployment rate declined to 8 percent in June as against 8.1 percent in the previous month.
UK’s manufacturing PMI index dropped more than expected to 49.1 in July from the previous level of 51.4 in June. The index declined mainly due to weaker domestic demand from the country.
Spot Gold prices declined mainly due to easing concerns with regard to the US debt situation after US President Barack Obama stated that the country’s officials reached an agreement to increase debt limit. This led to rise in risk appetite amongst the investors globally and made gold look unattractive today.
Weakness in the US dollar coupled with upbeat global market sentiments helped crude oil prices trade higher today. On the MCX, crude oil prices gained 1 percent and are trading at Rs4286/bbl till 4.00 pm IST today.
The base metals complex traded higher on the LME today as easing concerns over US debt default led to optimism in the global markets. Additionally, a weaker dollar also provided further support. Nickel was the top performer of the day as he metal gained 0.8 percent on the LME as well as on the MCX today.
Outlook
We expect gold to trade lower today mainly taking cues from positive sentiments in the global markets due to easing US concerns which will reduce safe-haven demand for gold. But a weaker dollar may cushion sharp decline.
Base metal and crude oil prices are expected to trade higher today mainly on account of easing worries over US debt default coupled with positive sentiments in the global markets.
Additionally, dollar weakness will also provide further support.
Courtesy: Angel Commodities
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