Base Metals, Oil Down On OECD Comments

European markets are trading on a positive note on expectations that Chinese and European policymakers will boost economic growth by way of new measures and actions.

U.S. stocks are up, despite statements by the Organization for Economic Cooperation and Development (OECD) that the European debt crisis continues to pose a risk for the global economy. Coupled with Japan’s credit ratings cut by Fitch Ratings, things look shaky at best.

Spot Check
Spot gold prices declined by 0.8% due to strength in the U.S. Dollar Index (DX). The yellow metal touched an intraday low of $ 1573.14/oz and hovered at $1577.76/oz. On the MCX, prices declined around 0.1% and were trading at Rs.29,009/10 gms till 4:30pm IST today. Taking cues from the fall in gold prices and a downside in base metals, Spot silver prices declined more than 1%. Additionally, strength in the DX also exerted downside pressure on prices. The white metal touched an intra-day low of $27.97/oz and was trading around $28/oz till 4:30pm IST. 

On the domestic front, prices declined around 0.2% and hovered at Rs.54,023/kg after touching an intraday low of Rs.53,873/kg. The base metals pack traded lower due to dollar strength and statements from the OECD highlighting global economic concerns. Copper prices declined around 0.4% on the LME and hovered at $7726.50/tonne. Although prices on the international bourses declined, the red metal on the MCX gained 0.3% on the back of Rupee depreciation. 

Oil Hovers
Nymex crude oil prices declined around 0.5% today on the back of an expected rise in U.S. crude-oil inventories coupled with a stronger DX. Oil prices touched an intraday low of $91.90/bbl and traded around $92.10/bbl till 4:30pm IST today. On the domestic bourses, prices gained around 0.4% due to depreciation in the Indian Rupee and hovered around Rs.5,146/bbl till 4:30pm IST. 

The American Petroleum Institute (API) is scheduled to release its weekly inventories today and U.S. crude-oil inventories are expected to increase by 1.5 million barrels for the week ending May 18th. Gasoline is expected to gain by 500,000 barrels and distillate inventories are expected to remain unchanged for the same week.

Crude-oil prices are expected to fall today as forecasts of a rise in inventories -- along with a comfortable supply-side scenario -- adds to pressure on prices. With the Rupee continuing to depreciate, losses on the MCX platform for precious metals, base metals and crude oil will be cushioned.

Precious metals and base metals are expected to witness downside pressure in today’s trade on the back of a stronger dollar coupled with weak global-market sentiments. Although the day opened with upbeat market sentiment, they've bcome mixed on comments from the OECD.