Precious metals, Crude may trade sideways with upward 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 sideways with upward bias on the back of upbeat global market sentiments and weakness in the DX.

• UK’s Manufacturing Production declined by 2.9 % in June.
• Italian Prelim GDP declined by 0.7 % in Q2 of 2012.
• German Factory Orders declined by 1.7 % in June.

European equities are trading on a mixed note on the back of unfavorable economic data from country. Asian markets ended on a positive note and US stock futures are trading in the green.

Italian Industrial Production declined by 1.4% in June as against a rise of 1% a month ago. Italian Prelim Gross Domestic Product (GDP) declined by 0.7% in Q2 of 2012 from previous decline of 0.8% in Q1 of 2012. German Factory Orders declined by 1.7% in June with respect to rise of 0.7% in earlier month.

UK’s Manufacturing Production declined by 2.9% in June from previous rise of 1.2% a month ago. Industrial Production also declined by 2.5% in June as compared to rise of 1% in prior month.

Spot Gold prices gained around 0.3% on account of upbeat global market sentiments. Additionally, weakness in the US Dollar Index (DX) also helped upside in the yellow metal prices. On the MCX, Gold October contract traded on a flat note as a result of appreciation in the Indian Rupee.

Taking cues from rise in gold prices coupled with upside in the base metals set, Spot silver prices increased around 0.4%. Additionally, a weaker DX also acted as a positive factor for the white metal prices.

The base metals pack traded on a positive note today on the back of rise in risk appetite in the global markets coupled with weakness in the DX. Additionally, decline in LME inventories also helped upside in the prices.

Copper, the leader of the base metals complex gained by 1.1% today taking cues from upbeat global market sentiments along with weakness in the DX. Also, decline in LME Copper inventories by 0.4% which stood at 245,050 tonnes also supported upside in the prices.

Nymex crude oil prices gained around 0.3% today taking cues from expectations of decline in US crude oil inventories coupled with Tropical Storm Ernesto moving at faster speed from the western Caribbean Sea. Also, a weaker DX acted as a positive factor for the crude oil prices. Appreciation in the Indian Rupee capped sharp gains in the prices on the MCX.

The American Petroleum Institute (API) is scheduled to release its weekly inventories today and US crude oil inventories are expected to decline by 1.6 million barrels for the week ending on 3rd August 2012.

Outlook: In today’s session we expect precious metals, base metals and crude oil prices are expected to trade sideways with upward bias on the back of upbeat global market sentiments and weakness in the DX.

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