Precious, base metals may come under pressure today: Angel

Angel Commodities has come out with its report on international commodities. According to the research firm, precious metals and base metals could come under pressure as GDP expectations for the US are grim.

• India’s GDP grew at 5.3 percent in Q4 of 2011-12.
• US crude oil inventories expected to rise by 0.6 mn bbl - Reuters.
• Spot Rupee touched fresh all time low of 56.52/$ today.

European equities traded with a positive bias on the back of expectations that Ireland will back for the austerity measures coupled with rise in German retail sales also supported upside. Asian markets ended on a negative note but US stock futures are trading in the green.

India’s GDP grew at 5.3 percent for the March quarter of 2012 as against 6.1 percent in previous quarter. For the fiscal year of 2011-12, the Indian economy grew at 6.5 percent from 8.4 percent in the previous financial year of 2010-11. The manufacturing sector declined by 0.3 percent in Q4 of 2011-12 compared to a rise of 7.3 percent in the same period last fiscal year. Industry and service sector grew at 1.9 percent and 7.9 percent respectively for the quarter ended on March 2012.

Spot gold prices erased its losses made in the previous trade and increased around 0.3 percent today on the back of weakness in the US Dollar Index (DX). The yellow metal touched an intra-day high of $1570.90/oz and hovered around $1566/oz till 4:30pm IST today. Taking cues from upside in gold prices and mixed performance in the base metals complex, Spot silver prices gained by 0.7 percent today. The white metal touched an intra-day high of $28.20/oz and was trading around $28.05/oz today. On the MCX, appreciation in Indian Rupee led to fall in silver prices and touched a low of Rs.54,153/kg till 4:30pm IST today.

The base metals pack traded on a positive note on the back of weakness in the dollar index and positive German retail sales data also provided upside. LME copper prices traded on a flat note and hovered around $7,510/tonne today.

Nymex crude oil prices bounced back after touching an intra-day low of $87.42/bbl and gained 0.2 percent today. However, further upside in prices was capped on account of expectations of rise in US crude oil inventories. On the domestic bourses, prices declined by 0.1 percent on account of appreciation in Indian Rupee and were trading around Rs.4,957/bbl till 4:30pm IST today.

The US Energy Department (EIA) is scheduled to release its weekly inventories report today at 8:00pm IST and US crude oil inventories is expected to rise by 0.6 million barrels for the week ending on 25th May 2012. Gasoline stocks are expected to decline by 0.8 million barrels whereas distillate inventories are also expected to fall by 0.1 million barrels for the same period.

Outlook
Economic data from the US is expected to come on a mixed note today and if the GDP data comes in as per expectations then it could lead to risk aversion in the global markets. Precious metals and base metals could come under pressure as GDP expectations for the US are grim.

The DX is also expected to weaken on account of this data expectation and we expect crude oil prices to also witness downside pressure today. Oil inventories are expected to increase and this factor too will act as a negative factor for the commodity.

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.