Precious, base metals may trade positive: Angel Commodities

Angel Commodities has come out with its report on international commodities. According to the research firm, precious metals and base metals are expected to trade on a positive note on the back of rise in risk appetite in the global markets coupled with weakness in the DX.

• UK’s Manufacturing Production rose by 1.2 percent in May.
• Spot Rupee appreciated around 0.8 percent today.
• US crude oil inventories expected to decline 1.1 mn bbl Reuters.

European equities are trading on a positive note on the back of unexpectedly rise in industrial production in Italy and UK. Asian markets ended lower and US stock futures are trading in the green. UK’s Manufacturing Production rose by 1.2 percent in May from previous decline of 0.8 percent a month ago. Trade Balance was at a deficit of 8.4 billion Pounds in May as compared to previous deficit of 9.7 billion Pounds in April. Industrial Production rose by 1 percent in May with respect to decline of 0.4 percent in previous month.

French Industrial Production declined by 1.9 percent in May as against a previous rise of 1.4 percent a month ago. Italian Industrial Production rose by 0.8 percent in May from previous decline of 2 percent in earlier month.

Spot gold prices gained around 0.5 percent today on the back of rise in risk appetite in the global markets. Additionally, weakness in the US Dollar Index (DX) also helped upside in gold prices. The yellow metal touched an intra-day high of $1595.10/oz and hovered around same level till 4:30pm IST today. On the MCX, Gold August contract declined around 0.3 percent on account of depreciation in the Indian Rupee and was trading around Rs.29,578/10 gms today.

Taking cues from rise in gold prices coupled with weakness in the DX, Spot silver prices gained around 0.5 percent today. The white metal touched an intra-day high of $27.49/oz and was trading around $27.46/oz today. On the domestic front, prices declined by 0.5 percent on the back of appreciation in the Rupee and hovered around Rs.53,272/kg today till 4:30pm IST.

The base metals pack traded on a negative note on the back of rise in LME inventories. However, weakness in DX and upbeat global market sentiments restricted sharp fall in the prices. In the Indian market appreciation in the Rupee added further pressure on the prices.

Nymex crude oil prices declined around 0.6 percent taking cues from end of workers strike in Norway coupled with decline in China’s crude oil imports for the month of June. However, expectations of decline in US crude oil inventories along with weakness in the DX cushioned sharp fall in crude prices. On the domestic bourses, prices declined by more than 1 percent on the back of appreciation in the Indian Rupee.

The American Petroleum Institute (API) is scheduled to release its weekly inventories today and US crude oil inventories are expected to decline by 1.1 million barrels for the week ending on 6th July 2012.

Outlook
In the evening session, we expect precious metals and base metals to trade on a positive note on the back of rise in risk appetite in the global markets coupled with weakness in the DX. However, rise in the LME inventories of base metals might cap sharp gains in today’s session.

In case of crude oil prices will trade with a sideways bias on account of end of strike in Norway by platform workers there along with decline in Chinese crude oil imports. While, on the other hand expectations of decline in US crude oil inventories coupled with weakness in the DX will support upside in crude prices.

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