Gold remained volatile in the morning trading session. It made a high of $892.80 an ounce but could not sustain above that level. A breach of that level could have taken gold to $900 which is a good resistance level. Warren Buffett has bought a stake in Goldman Sachs Group Inc., buoying stocks and easing demand for gold as a haven from market turmoil. The movement in the market is still dicey and it is difficult to predict which way the economy is headed. However, fears of a delay to a $700 billion U.S. rescue plan kept the metal's safe-haven appeal intact. Silver is also tracking the movement in the yellow metal. The metal also used for industrial purposes is gradually increasing due to increased demand fro industrial metals.
Crude oil edged up towards $110 a barrel pausing from its 2.5 percent decline a day earlier, as forecast of a drop in U.S. crude stocks more than offset doubts about the U.S. government's financial rescue plan. A fire was extinguished at a Kinder Morgan Energy Partners LP's oil storage site in Pasadena, Texas, a company official said. The Pasadena facility is part of the Kinder Morgan's Houston complex, which takes oil products from refineries in Houston, Texas City, Corpus Christi and Sweeny, and pumps them into the Colonial, Teppco, Explorer and Magellan pipeline systems. The news of fire and expectation of drawdown in the crude stocks fueled the rally in oil markets.
Aluminium is the weakest among all the base metals. Shanghai aluminum futures fell 2.2 percent on Wednesday to their lowest in four years on concerns over swelling stockpiles and worries that China's smelters would continue to churn out metal despite weak demand. The slowing demand and oversupply are the main factors weighing on the metal. Copper, Zinc and lead on the other hand have increased in the morning trading session. The inventories of the metal were negative giving a minor boost to the prices. Codelco, Chile's state-owned copper miner, on Tuesday suspended a deal that gave a Chinese company the right to buy about half its newest mine, quelling domestic critics but potentially irking a major foreign partner which indicates that the rise in the red metal may not be sustainable.
Courtesy: Religare commodities
