Expect precious metals, crude oil to trade sideways: Angel

Angel Commodities has come out with its report on international commodities. According to the research firm, precious metals, base metals and crude oil prices are expected to trade sideways on the back of negative global markets and thereby rise in the risk aversion amongst market participants might exert downside pressure.

• German Unemployment Change was at 9,000 in the last month.
• UK’s Net Lending to Individuals increased 0.9 bn Pounds in July.
• LME Copper inventories declined by 1.6 percent in today’s trade.

European equities are trading lower on the back of concerns of slow global economic growth. Asian markets ended lower and US stock futures are trading in the red.

German Unemployment Change remained unchanged at 9,000 in last month. European Retail Raw Materials Price Index (RMPI) declined by 2 points to 44.4-mark in August as against a previous level of 46.4 in July.

UK’s Net Lending to Individuals increased by 0.9 billion Pounds in July as against a previous decline of 0.1 billion Pounds a month ago. M4 Money Supply increased by 0.5 percent in last month from previous decline of 1.6 percent in June. Mortgage Approvals increased by 3,000 to 47,000 in July as compared to previous rise of 44,000 in June.

Spot gold prices are trading on a flat note on the back of rise in risk aversion in the global markets. However, weakness in the US Dollar Index (DX) cushioned sharp fall in the prices.

Taking cues from fall in gold prices, Spot silver prices also declined around 0.6 percent today. However, sharp downside in the prices was restricted on the back of weakness in the DX along with positive sentiments in the base metals.

The base metals pack traded on a positive note on account of decline in LME inventories  except Nickel  coupled with weakness in the DX. However, further upside in the prices was capped as a result of weak global market sentiments.

Copper, the leader of the base metals group increased by 0.5 percent today on account of decline in LME copper inventories by 1.6 percent and stood at 230,175 tonnes coupled with weakness in the DX. However, further upside in the prices was prevented on the back of negative global market sentiments. The red metal touched an intraday high of $7,640/tonne and hovered around $7,615/tonne today till 4:30pm IST.

Nymex crude oil prices declined 0.14 percent today taking cues from unexpected rise in US crude oil inventories yesterday coupled with weakness in the Tropical Storm Isaac reducing the threat to offshore oil platforms in Gulf of Mexico. However, weakness in the DX cushioned sharp fall in the crude oil prices.

Outlook: In today’s session we expect precious metals, base metals and crude oil prices to trade sideways on the back of negative global markets and thereby rise in the risk aversion amongst market participants might exert downside pressure. While weakness in the DX along with expectation of favourable US unemployment data might cushion sharp fall in the commodity prices.

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