Precious, base metals, crude may trade with a negative bias

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 with a negative bias on account of rise in risk aversion in the global markets coupled with strength in the DX.

• India’s WPI inflation rose by 7.55 percent in May.
• LME copper inventories rose by 0.7 percent today.
• Spot Rupee depreciated around 0.5 percent today.

European equities are trading on a negative note today on the back of Spain and Cyprus being downgraded by Moody’s Investors. Asian markets also ended lower and US stock futures are trading in the green.

India’s WPI inflation increased by 7.55 percent in May from 7.23 percent in April. Food inflation was at 10.74 percent in last month compared to 10.5 percent in April.

Spot gold prices gained around 0.1 percent in today’s trading session. However, strength in the US Dollar Index (DX) capped further gains in gold prices. The yellow metal touched an intra-day high of $1623/oz and hovered around $1619/oz till 4:30pm IST today. On the MCX, Gold August contract increased by 0.3 percent on account of depreciation in the Indian Rupee and was trading around Rs.30,133/10 gm today.

Taking cues from rise in gold prices coupled with upside in the base metals pack, Spot silver increased around 0.3 percent today.

However, a stronger DX restricted further upside in the silver prices. The white metal touched an intra-day high of $29.10/oz and was trading around $28.89/oz today. On the domestic front, prices gained around 0.3 percent and hovered around Rs.55,157/kg after touching an intra-day high of Rs.55,361/kg till 4:30pm IST today. However, depreciation in the Indian Rupee also acted as a positive factor for the commodity.

The base metals complex traded on a positive today on the back of decline in LME inventories. Copper, the leader of the base metals increased around 0.3 percent in today’s trading session. However, further upside in the prices was capped on the back of rise in LME copper inventories around 0.7 percent which stood at 245,075 tonnes.

The red metal touched an intra-day high of $7,443/tonne and hovered around $7,395/oz till 4:30pm IST. On the domestic front, gained by 0.5 percent on the back of depreciation in the Indian Rupee and was trading around Rs.412/kg today.

Nymex crude oil prices gained by 0.2 percent today on expectations of mixed economic data from the US. Crude oil prices touched an intra-day high of $83.08/bbl and hovered around $82.78/bbl today. On the domestic bourses, prices traded on a flat note and was trading around Rs.4,626/bbl till 4:30pm IST today.

Outlook
In the evening session, we expect precious metals, base metals and crude oil prices to trade with a negative bias on account of rise in risk aversion in the global markets coupled with strength in the DX.

US Core CPI and unemployment claims are expected to come on mixed note and if it comes more than forecasted then it can exert downside pressure on the commodities.

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