Precious, base metals, Crude may trade lower: Angel

Angel Commodities has come out with its report on international commodities. According to the research firm, precious metal, base metals and crude oil prices are expected to trade lower on the back of rise in risk aversion in the global markets which will lead rise in demand for low yielding currency like DX and add downside pressure on the prices of the commodities.

Indian Rupee depreciated by more than 1% in today’s trade.
Nymex crude oil prices declined by more than 2% today.
US Dollar Index (DX) gains by 0.3% today till 4:30pm IST.

European equities are trading on a bearish note on the back of Euro zone debt mounting as the European leaders are unable to draw out a plan to curtail the debt. Asian markets also ended on a bearish note and US stock Futures are trading in red tracking negative market sentiments.

Spot gold prices declined 0.75% today. Further, strength in the US Dollar Index (DX) also added to the losses of the yellow metal. The gold prices touched an intra-day low of $1,568.04/oz and hovered around $1,570.91/oz till 4:30pm IST today. On the MCX, Gold August contract gained by 0.3% on account of depreciation in the Indian Rupee and were trading around Rs.29,309/10 gms today.

Taking cues from downside in gold and base metals prices, Spot silver prices declined 1.3% today. Additionally, strength in the DX also acted as a negative factor for the silver prices. In the Indian markets sharp downside in prices was cushioned on the back of depreciation in the Indian Rupee.

The white metal touched an intraday low of $26.81/oz and hovered around $26.93/oz till 4:30p.m today. In the domestic markets prices declined 0.2% and was trading around Rs.52,570/kg after touching a low of 52618/kg till 4:30 p.m in today’s trade.

The base metals pack traded lower today on account of weak global market sentiments, expectations of slowdown in China and US along with strength in the DX. However, further downside in prices was cushioned on the back of decline in LME inventories.

Copper, the leader of the base metals group decline around 2.6% on the LME and hovered around $7,379/tonne today till 4:30pm IST. On the domestic front, prices declined around 1.3% and were trading around Rs.416.95/kg after touching an intra-day low of Rs.415.6/kg today. However, depreciation in the Indian Rupee restricted sharp fall in prices on the MCX.

Nymex crude oil prices declined around 2.5% today on the back of expectations of slowdown in China and US, Euro Zone debt concerns will curb demand for fuel along with strength in the DX.

Crude oil prices touched an intra-day low of $88.44/bbl and were trading around $89.14/bbl today. On the domestic bourses, prices declined and hovered around Rs.5,040/bbl after touching an intra-day low of Rs.5,007/bbl till 4:30pm IST today. But sharp downside in prices was prevented taking cues from depreciation in the Indian Rupee.

Outlook: In the evening session, we expect precious metal, base metals and crude oil prices to trade lower on the back of rise in risk aversion in the global markets which will lead rise in demand for low yielding currency like DX and add downside pressure on the prices of the commodities.

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