Base metals gain on demand recovery, gold dips 2%

By Manisha Gupta, Commodities Editor, CNBC-TV18

NYMEX Crude April Futures gained 6.5% to above $42 a barrel. There are lot of factors, which supported the crude prices yesterday: US weekly inventory gained less than expected, where in crude inventories was up 17% (YoY); gasoline stocks declined 3.4 million barrels, which was down 7.5% (YoY); gasoline demand went up 1.7% (YoY).

Refinery operations declined 0.9% to 81.4% while distillate stocks gained 8 lakh barrels to 141.6 million barrels. Near-term range for crude prices is seen between $39-45/bbl. It is currently trading at USD 42.7 a barrel.

Base metals gained on demand recovery. Zinc rose 2.5% to 2-week highs and copper gained 3.6%. Aluminium was up 1.5% and tin up 2%. Nickel went up 2.8% and lead up 3.5%.

China is planning to cut down metal output capacity. There is an increase in LME cancelled warrants. Equity rebound and weak dollar supported buying in metals.

However, gold declined 2% to $955 an ounce, which fell for third session as equities gained. US policy makers' assurance of recovery in economy is putting pressure on the prices.

Cotton dropped to 2-month lows on weak demand.