Expect Gold, Silver to trade lower: Angel Commodities

Angel's report on international commodities

News and Analysis

• German Factory Orders declined by 1.3 percent in month of May.
• European equities trading higher & US sock futures in green today.

European equities are trading higher today ahead of the jobs data from US. Asian markets ended on a positive note and US stock futures are trading in the green. French Trade Balance was at a deficit of 6 billion Euros in May as against an earlier deficit of 4.5 billion Euros a month ago. German Factory Orders declined by 1.3 percent in May from earlier fall of 2.3 percent in prior month. Spot gold prices declined around 0.8 percent today on the back of strength in the DX. Further, SPDR gold holdings at lowest levels since February 2009 also exerted downside pressure on prices. The yellow metal touched an intra-day low of USD 1231.79/oz and hovered around USD 1239.30/oz today till 4:30pm IST. In the Indian markets prices fell around 0.5 percent but depreciation in the Rupee cushioned sharp fall in the prices. Taking cues from fall in gold prices along with downside in the base metals complex, Spot silver prices fell around 1.2 percent today. Further, strength in the DX coupled with unfavorable data from the Euro Zone exerted downside pressure on prices. The white metal touched an intra-day low of USD 19/oz and was trading at USD 19.27/oz till 4:30pm IST today. Depreciation in the Indian Rupee prevented sharp fall in prices on the MCX. The base metals group traded on a negative note in today’s trade on the back of strength in the DX coupled with weak economic data from the Euro Zone. Further, strength in the DX added downside pressure on prices. Additionally, mixed LME inventories scenario acted as a negative factor for prices on the MCX. Copper, the leader of the base metals pack fell more than 1 percent on account of stronger DX. Further, fall in German factory orders data also exerted downside pressure on the prices. However, sharp downside in prices was cushioned as a result of fall in LME copper inventories by 0.5 percent which stood at 660,000 tonnes. On the domestic bourses, prices fell 0.6 percent but depreciation in the Rupee restricted sharp fall in prices.
Nymex crude oil prices gained 0.2 percent today taking cues from sharp decline in inventories during the week coupled with unrest in Egypt. However, strength in the DX capped sharp gains in the prices. On the domestic bourses, prices rose 1 percent on account of depreciation in the Rupee. Outlook: In the evening session, we expect precious metals, base metals and crude oil prices to trade lower on the back of expectations of favorable jobs data from the US which will increase the concerns that Fed will pullback its stimulus measures. Additionally, strength in the DX will exert downside pressure on prices. Further, unfavorable German factory orders data will act as a negative factor. Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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