Base Metals in Mixed Trend, Crude Oil Gains on Iran Supply Fears

European markets recovered as European Central Bank (ECB)’s step to inject huge amount of money lifted market sentiments.

Spanish bonds advanced after the government met its maximum target at an auction. Spain’s borrowing costs declined in its first debt sale since the European Central Bank lent banks billions of Euros to prevent a credit crunch.

Spot gold prices rose sharply by 1.2 percent today as, buying at lower level were observed after a sharp fall in the previous trading session. Additionally, a weaker dollar also acted as a positive factor for prices.

The yellow metal hit an intra-day high of $1724/oz and was trading at the level of $1715/oz till 4.30 pm IST. On the MCX, Gold April contract declined around 0.2 percent and touched an intraday low of Rs27,809/10 gm till 4.30 pm IST today.

Taking cues from rise in gold prices coupled with weakness in the US dollar, spot silver also traded higher by 0.4 percent in today’s trade. The hit metal touched an intra-day high of $35.15/oz and was hovering around $34.70/oz till 4.30 pm IST. On the MCX, Silver May contract traded on a flat note and touched an intra-day low of Rs57,562/kg till 4.30 pm IST today.

The base metals complex traded on a mixed note on the LME today with lead and zinc trading in the red while copper, aluminium and nickel managed to trade in the green.

Copper, the leader of the base metals pack, traded higher by 0.3 percent on the LME today. The red metal inventories on the LME warehouses dropped sharply by 1.4 percent to 292,250 tonnes which helped copper prices to trade higher today.

Nymex crude oil prices increased by 0.2 percent today as the US increased pressure on Iran to stop its nuclear program which led to increase fears of supply concerns from Iran. Additionally, a weaker dollar also acted as a positive factor for the commodity.

Oil prices touched an intra-day high of $8578/bbl and was hovering around $8553/bbl till 4:30pm IST today. On the MCX, crude oil prices increased by 1.5 percent after touched an intraday high of Rs5309/bbl and were hovering around Rs5308/bbl till 4:30pm IST today.

Outlook

Expectations of positive US ISM Manufacturing data at 8.30pm IST today will lead to revival in the global markets. On account of this coupled with a weaker dollar, we expect gold and silver prices to trade higher today.

Base metals are expected to trade higher today taking cues from dollar weakness, expected positive manufacturing data from the US and revival in the markets.

Crude oil prices are expected to trade with a positive bias today on the back of increasing supply concerns from Iran and a weaker dollar.