Base Metals Edge Lower On China's Unfavorable Inflation Data: April 11, 2012

The base metals complex on the MCX traded on a negative note on Monday, with copper being the worst performer of the day.

The red metal declined sharply by 1.7 percent on the MCX and touched an intra-day low of Rs. 422/kg yesterday.

Unfavorable inflation data from China weakened the demand outlook for copper. The red metals ended its trading session at Rs. 422.8/kg on Monday.

However, less volatility was observed in trading of base metals on the MCX on Monday as the London Metal Exchange was closed for the Easter Holiday.

Crude Oil Weighs Down On Global Supply Worries

Nymex crude oil prices declined by 1.2 percent yesterday on the back of the news that Iran has agreed to resume its nuclear talks with US and its allies that eased the supply worries.

Additionally, unfavorable inflation data from China created demand concerns for crude oil from the country.

However, a further downside in prices was restricted on account of a weaker Dollar Index. Oil prices touched an intra-day low of $100.81/bbl and closed at $102.10/bbl in yesterday’s trading session.

On the MCX, prices declined by 0.8 percent and closed at Rs.5,238/bbl after touching an intra-day low of Rs.5,193/bbl on Monday.

API Inventories Forecast

The American Petroleum Institute (API) released its weekly inventories last week and US crude oil inventories were expected to increase by 2.1 million barrels for the week ending on 6th April 2012.

Gasoline stocks are expected to decline by 1.0 million barrels and distillate inventories are also expected to rise by 0.1 million barrels for the same week.

Precious Metals Settle Higher On China's Inflation Data

Spot gold prices traded higher by 0.2 percent on Monday on the back of China’s inflation data which fueled inflation-led demand for gold.

Additionally, weakness in the US dollar also acted as a supportive factor for the yellow metal prices. Gold touched an intra-day high of $1648.50/oz and closed at $1640.80/oz on Monday.

On the MCX, the Gold June contract rose around 0.9 percent on account of depreciation in the Indian rupee and touched an intra-day high of Rs. 28,390/10 gms. The yellow metal closed its trading session at 28,329/10 gms on Monday.

Silver

Spot silver prices declined around 0.7 percent on Monday on the back of weak sentiments in global markets. However, weakness in the US Dollar Index cushioned sharp declined in the white metal prices.

Silver touched an intra-day low of $31.28/oz and ended its trading session at $31.5/oz yesterday.

MCX Silver May contract declined slightly by 0.1 percent and touched an intra-day low of Rs. 55,601/kg on Monday.