Expect bullion, base metals, crude to trade higher: Angel

Angel's report on international commodities

News and Analysis

• European equities trading up, US stock futures in positive note.
• German WPI declined by 0.4 percent in the month of June.
• French CPI rose around 0.2 percent in the last month.

European equities are trading higher today on the back of statement from Federal Reserve Chairman Ben Bernanke that accommodative policy is required for world’s largest economy US and will not reduce its stimulus measures. Asian markets ended on a positive note and US stock futures trading in the green.

German Wholesale Price Index (WPI) declined by 0.4 percent in the month of June. French Consumer Price Index (CPI) rose by 0.2 percent in June from earlier rise of 0.1 percent in May.

Spot gold prices increased around 1.5 percent today on the back of weakness in the US Dollar Index (DX). Further, upbeat global market coupled with statement from Fed on continuation of its stimulus measures. The yellow metal touched an intra-day high of USD 1298.36/oz and hovered around USD 1282.79/oz today till 4:30pm IST. In the Indian markets, appreciation in the Rupee capped upside in prices.

Taking cues from rise in gold prices along with upside in the base metals group, Spot silver prices increased around 2.5 percent today. Additionally, a weaker DX acted as a positive factor for prices. The white metal touched an intra-day high of USD 20.26/oz and was trading at USD 19.82/oz till 4:30pm IST today. Appreciation in the Rupee capped sharp gains in prices on the MCX.

The base metals complex traded on a positive note as a result of optimistic global markets. Further, weakness in the DX supported an upside in prices. Additionally, decline in LME inventories except Nickel acted as a positive factor. On the domestic front, appreciation in the Rupee restricted sharp upside movement in prices.

Copper the leader of the base metals pack rose more than 3 percent as a result of weakness in the DX coupled with positive market sentiments. Further, decline in LME by 0.1 percent which stood at 645,175 tonnes supported an upside in prices. Additionally, favorable statement from Fed Chairman regarding cut in stimulus measures acted as a positive factor. Appreciation in the Rupee prevented sharp upside in prices on the MCX.

Nymex crude oil prices declined around 0.7 percent today on the back of correction in prices after sharp rise in crude prices in yesterday’s trade. However, fundamentals remain support on the back of weakness in the DX, declining trend in crude oil inventories along with unrest and political turmoil in Egypt. Appreciation in the Rupee prevented sharp upside in prices on the MCX.

Outlook: In the evening session, we expect precious metals, base metals and crude oil prices to trade higher on the back of weakness in the DX coupled with upbeat global markets. Further, statement from Fed Chairman Ben Bernanke regarding continuation of stimulus measures will support an upside in prices.

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