Bullion may trade negative on weak global cues: Angel

Angel's report on international commodities

News and Analysis:

German Unemployment Change increased by 21,000 in April. UK’s CBI Realized Sales was at -11-mark in May. European markets are trading lower on the back of weak German economic data. Asian markets ended on mixed note. US stock futures are trading in red.

German Unemployment Change increased by 21,000 in April as against a rise of 6,000 in March. European Money Supply rose by 3.2 percent in April from earlier gain of 2.6 percent a month ago. Europe’s Private Loans fell by 0.9 percent in last month as compared to decline of 0.7 percent in March.
UK’s Confederation of British Industry (CBI) Realized Sales was at -11-mark in May from earlier fall of 1-level in April

Spot gold prices decreased by 0.10 percent on the back of weak economic data from Germany. Further, continuous decline in SPDR gold trust holding added downside pressure on the prices. However, sharp downside in the prices was cushioned on the back of weakness in DX coupled with demand from central banks. In the Indian markets. Depreciation in the Indian Rupee prevented sharp fall in the prices.

Taking cues from decline in spot gold prices coupled with weak economic data from Germany, Spot silver prices decreased by 0.08 percent today. Further, weak global market sentiments kept prices under pressure. However, sharp fall in the prices was cushioned on the back of weakness in DX. In the Indian markets, depreciation in the Indian rupee supported prices to trade in green.

The base metals pack traded on the mixed note on the back of weak global market sentiments. Further, rise in worries over economic growth of the largest consumer of industrial metal, China kept prices under pressure. However, decline in LME inventories coupled with weakness in DX cushioned sharp downside in the prices.

Copper, the leader of the base metals complex decreased by 0.42 percent on the back of weak global market sentiments. Further, weak economic data from Germany added downside pressure on the prices. Additionally, IMF slashed its growth forecast for China which kept prices under pressure. However, weakness in DX prevented sharp downside in the prices. In the Indian markets, depreciation in the Indian Rupee cushioned sharp downside in the prices.

Crude oil prices decreased by 0.56 percent on the back of weak global market sentiments coupled with rise in worries over China’s economic growth. Further, expectations that OPEC will maintain its current production quota which is at higher level kept prices under pressure. However, weakness in DX along with expectation of decline in US crude oil inventories by API cushioned sharp fall in the prices.

The American Petroleum Institute (API) is scheduled to release its weekly inventories today and US crude oil inventories are expected to fall by 1.1 million barrels for the week ending on 24th May 2013.

Outlook
In the evening session we expect precious metal, base metal and crude oil prices to trade on the negative note on the back of weak global market sentiments coupled with rise in worries over China’s economic growth. Further, unfavorable economic data from Germany and UK may add downside pressure on the prices. However, weakness in DX may cushion sharp fall in the prices.

US crude oil inventories from API is expected to decline which may cushion sharp fall in the prices.

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