Stronger rupee may further weaken Gold prices: Emkay

Emkay Commodity Research has come out with its report on precious metals, base metals and energy. According to the research firm, Gold in India is expected to follow international prices and a stronger rupee would further weaken the prices.

Precious Metals

• U.S. COMEX gold futures for February delivery settled up $1.20 at $1,660.70 an ounce after a session high at $1,668.70.
• Gold was up on optimism that a deal would be reached to avert the fiscal cliff as Obama returned from his vacations and budget talks are expected to resume today.
• Due to Christmas holidays and Boxing day in the Euro area volumes in international markets were low
• Gold is expected to go down as investors would await the decision on fiscal cliff before taking any fresh positions.
• Gold in India is expected to follow international prices and a stronger rupee would further weaken the prices.
• Gold for February delivery on the Multi Commodity Exchange (MCX) was 0.51 percent down at INR 30698/10gms.

Base Metals

• In New York, COMEX copper for March delivery closed at 359.75, up by $5.15, or 1.45%
• Copper prices were slightly up as markets reopened after the Christmas break and optimism on US budget talks supported the prices.
• China’s industrial profits jumped 22.8% in November from the previous year which also supported the prices.
• Base metals likely to move in a range as investors would await the decision on fiscal cliff.
• Three-month copper on the London Metal Exchange lost 0.36 percent to $7,818 a tonne.

Energy

• U.S. February crude was up $2.37, or 2.67 percent, to settle at $90.98 a barrel, with volumes about half of the 30-day average
• Crude oil prices were up due to technical buying and continued tensions in the Middle East.
• Crude was also up as signs of efforts to negotiate a deal boosted investor confidence that a crisis can be averted.
• We expect Crude oil prices go up as some positive outcome is expected today as Obama would address the fiscal cliff issue in the Senate.
• U.S. natural gas futures ended higher on Wednesday, underpinned by chilly U.S. weather forecasts for the next week.
• We expect Natural Gas prices to go up as heating demand is likely to push natural gas prices up
• Front-month January natural gas futures on the New York Mercantile Exchange, ended up 4.6 cents, or 1.4 percent, at $3.392 per million British thermal units after trading between $3.30 and $3.408.

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