Expect Crude to trade lower today: Angel Commodities

• LME inventories of zinc increases more than 1 percent today.
• Indian Rupee depreciates in today’s trading session.
• US crude oil inventories are expected to increase by 2.6mb-EIA.

European markets traded lower today taking cues from statement by Federal Reserve Chairman Ben Bernanke’s which indicated that the US economic growth is not assured. He also warned that the country’s unemployment is still high and that of housing markets is still weak. This led to spread the wave of risk aversion in global markets.

Gold prices traded lower by 0.2 percent to $ 1675.96/oz till 4.30 pm IST today, mainly taking cues from weak sentiments in global markets. Moreover, downside in crude oil prices also decreased the inflation-led demand for gold. On the MCX, Gold April contract declined around 0.3 percent and touched an intra-day low of Rs. 28,17/10 gms till pm IST today.

Taking cues from fall in gold prices coupled with downside in base metals pack, spot silver also came under pressure today. Silver touched an intra-day low of $ 32.31/oz and was trading at 32.47/oz till 4.30 pm IST today. MCX Silver May contract declined around 0.3 percent and touched an intra-day low of Rs. 57,063/kg till 4.30 pm IST.

Base metals complex delivered a weak performance on the LME today, with zinc being a worst performer during the session. Choppy sentiments in global markets and rising concerns over global economic growth acted as a negative factor for the metal prices. Zinc inventories on the LME warehouses rose more than 1 percent to 898,675 tonnes today and this also exerted downside pressure on zinc prices.

Nymex crude oil prices declined by almost 1 percent today on the back of expected rise in US crude oil inventories coupled with rising expectations that the US may release its strategic oil reserves. Oil prices touched an intra-day low of $ 106.22/bbl and was hovering around $ 106.33/bbl today till 4:30pm IST. On the MCX, crude oil April contract declined by 0.6 percent and was trading at Rs. 5443/bbl after touching an intra-day low of Rs.
5430/bbl till 4:30pm IST today.

The US Energy Department (EIA) is scheduled to release it weekly inventories report today at 8:00pm IST and US crude oil inventories are expected to increase by 2.6 million barrels for the week ending on 23rd March 2012. Gasoline stocks are expected to  decline by 1.30 million barrels whereas distillate inventories are also expected to fall by 0.1 million barrels for the same period.

Outlook
We expect gold and silver to trade with a sideways positive bias in the evening session today. US Durable Goods Orders data is expected to be on a positive note and if the data comes as expected then this will lead to rise in risk appetite in the US markets.

Base metals are expected to trade with a sideways bias in the evening session. The metals pack will largely take cues from the US economic data to be released at 6.00 pm IST today.

We expect crude oil prices to trade lower today, mainly on the back of expected rise in US crude oil inventories to be released at 8.00 pm IST. However, expected positive data from the US and weakness in the US dollar index may cushion sharp fall in oil prices.

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