Commodities recap evening of 6th March, 09

Bullion stayed buoyant. Traders are awaiting key U.S. non-farm payrolls data due for release at 1330 GMT for clues as to the next direction of the markets. Gold was supported after the European Central Bank cut interest rates by 50 basis points, as expected. The metal rose overnight as Dow Jones Industrial Average (DJIA) declined further touching an 11 year low of 6544.1 indicating that US is tremendously under recession thus shifting the investment demand in the yellow metal. The Bank of England cut rates by 50 basis points to a historic low of 0.5 percent, and said it would buy assets worth 75 billion pounds to help the British economy. Demand for gold in India, the world's largest market for the precious metal, remained slack as prices rose for a second day , while selling of scrap stepped up as gold holders cashed in after the recent price gains.

Crude oil stayed above $43 a barrel. The signs of a tightening market suggest the Organization of the Petroleum Exporting Countries, which meets on March 15, may have removed enough supply to match the fall in demand caused by the weakening economy. OPEC will reduce crude-oil shipments by 1.9 percent in the month ending March 21, according to Oil Movements. Members will load 22.67 million barrels a day in the period, down from 23.1 million a day in the month ended Feb. 21, the Halifax, England- based tanker tracker said in a report yesterday. Due in part to lower supply from OPEC exporters, Russian crude oil has gained in value, the fuel oil market in Europe has turned on its head and bulging U.S. crude inventories are starting to be drawn down.

Base metals showed some another streak of hope for upside today, Shanghai copper rose for a fourth day on hopes domestic stockpiling would continue, while London was steady ahead of U.S. jobs data, having snapped a three-day winning streak overnight. But the decline in London and rise in Shanghai helped open the window again with Shanghai metal back around 650 yuan above the London price including China's 17 percent VAT. Zinc gained to $1,272 a ton, lead made a high of to $1,221 a ton, and nickel showed upside $10050 a ton and Aluminum rose to $1,342 a ton.

Courtesy: Religare Commodities

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