Commodities recap evening of 24th April, 09

Gold inched up in the morning and rose by almost 1 percent to a three-week high on Friday after China said its gold reserves has surged by nearly three-quarters since 2003, confirming years of speculation and raising hopes of more purchases to diversify its foreign exchange holdings, but USDINR strained as USD weaken further against rupee. However, A senior Chinese official was quoted as saying on Friday that Beijing has raised its gold reserves by 454 tonnes to a total 1,054 tonnes, the last time it revealed the figure. This makes it the fifth biggest gold reserve holder in the world. Prices have also been supported by physical demand from India, the world's largest consumer, ahead of the Akshaya Tritya festival on April 27, an auspicious time for gold buying.

Crude Oil mounted above $50 a barrel, supported by firmer stock markets and a weaker dollar, but the gains are still expected to be limited due to historically high inventories. Economic indicators due out later on Friday include U.S. durable goods orders for March, U.S. new home sales for March and the United Kingdom's first quarter preliminary GDP figures. China's economic growth will clearly improve in the second quarter, a leading government economist said, while U.S. Treasury Secretary Timothy Geithner said the decline in world trade may be abating and conditions in some financial markets have improved.

Copper slipped slightly in early trade to remain near two-week lows on Friday, as a fall in inventories offset persistent worries over demand and talk of Chinese buying tailing off. Shanghai copper fell more than 4 percent on Friday and posted its biggest weekly decline this year, hurt by a poor outlook for the global economy and worries that China may slow its metal buying. Weak demand was underscored by a fall in Japan's output of rolled copper products by a record 60 percent in March from a year ago, reflecting the sharp collapse in industrial demand from the world's fourth-biggest consumer. Other base metals also remained down throughout the day however, did not demonstrate much movement.

Courtesy: Religare Commodities

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