Expect precious, base metals, crude to trade lower: Angel

Angel Commodities' report on international commodities

News and Analysis

• German Manufacturing PMI fell to 48.7-mark in current month
• UK’s Retail Sales rose by 2.1 percent in the last month
• European Manufacturing PMI increased to 48.7-mark in June.

European equities are trading lower today on the back of announcement by Fed regarding tapering its stimulus spending. Asian markets ended lower and US stock futures trading in the red.

German Producer Price Index (PPI) declined by 0.3 percent in May as against a fall of 0.2 percent in April. French Flash Manufacturing Purchasing Managers' Index (PMI) increased by 1.9 points to 48.3-mark in June from rise of 46.4-level in May. German Flash Manufacturing PMI fell by 0.7 points to 48.7-mark in June with respect to 49.4-level in last month. European Flash Manufacturing PMI increased by 0.4 points to 48.7-mark in June from 48.3-level in May.

UK’s Retail Sales rose by 2.1 percent in May as against a decline of 1.1 percent in April. Confederation of British Industry (CBI) Industrial Order Expectations was at -18-mark in June from earlier fall of 20-level in May.

Spot gold prices declined 3.6 percent today on the back of weak global markets. Further, strength in the US Dollar Index (DX) exerted downside pressure on the prices. The yellow metal touched an intra-day low of USD 1285.90/oz and hovered around USD 1301.04/oz today till 4:30pm IST. In the Indian markets, depreciation in the Rupee cushioned fall in prices.

Taking cues from fall in gold prices along with downside in base metals complex, Spot silver prices declined 5.6 percent in today’s trade. Additionally, a stronger DX added downside pressure on the white metal prices. Depreciation in the Rupee prevented sharp fall in prices on the MCX.

The base metals pack traded on a negative note on the back of weak global markets coupled with strength in the DX. Additionally, unfavorable manufacturing data from China acted as a negative factor for prices. On the domestic front, prices fell but depreciation in the Rupee restricted fall in prices.

LME copper prices slipped around 2 percent today on account of rise in LME copper inventories by 0.8 percent which stood at 643,125 tonnes. Further, strength in the DX coupled with downside pressure from global markets acted as a negative factor. Additionally, fall in China’s manufacturing data exerted downside pressure on prices.

Nymex crude oil prices declined 1.9 percent taking cues from rising US crude oil inventories coupled with Fed announcement of reducing bond buying program by end of this year. Strength in the DX coupled with unfavorable data from China also exerted downside pressure on oil prices. On the domestic bourses, depreciation in the Rupee cushioned sharp fall in crude oil prices.

Outlook
In the evening session, we expect precious metals, base metals and crude oil prices to trade lower on the back of weak global markets. Further, strength in the DX coupled with Federal reserve announcement of tapering its bond buying program will exert more downside pressure on prices. However, sharp downside in prices will be marginally cushioned as a result of expectations of positive existing home sales and manufacturing data from US.

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