Base Metals Settle Lower On Positive US Consumer Confidence Data

Weakness in the US dollar coupled with favorable consumer confidence data from the US helped base metal prices to trade higher on the LME on Tuesday, with nickel being an exception.

Additionally, upbeat sentiments in the global markets also acted as a positive factor for the metal prices yesterday. However, appreciation in the Indian Rupee (INR) capped sharp gains on the domestic bourses on Tuesday.

Nickel

Nickel was the only one in the base metals pack to trade in the red on the LME in yesterday’s trading session. Sharp rise in nickel LME inventories acted as a negative factor for prices. The metal inventories rose sharply by 1.1 percent to 98,442 tonnes on the LME warehouses on Tuesday.

Nickel touched an intra-day low of $19,720/tonne and closed at the level of 19,850/tonne yesterday. On the MCX, Nickel February contract dropped sharply by more than 2 percent on account of a stronger Rupee and touched an intra-day low of Rs965.20/kg on Tuesday.

Crude Oil Remains Lower On Raising Us Inventories

Nymex crude oil prices declined almost 2 percent on Tuesday taking cues from rise in US crude oil inventories. However, further decline was resisted on account of weaker dollar along with supply concerns from Iran.

Oil prices touched an intra-day low of $106.30/bbl and closed at $106.6/bbl yesterday. On the MCX, prices declined more than 1 percent and closed at Rs.5325/bbl after touching an intra-day low of Rs.5310/bbl on Tuesday.

API Inventories Data

As per the American Petroleum Institute (API) report released yesterday, US crude oil inventories increased by 521,000 barrels to 341.9 million barrels for the week ending on 24th February 2012. Gasoline inventories fell by 916,000 barrels to 230.7 million barrels and whereas distillate inventories also declined by 3.31 million barrels to 140.1 million barrels for the same week.

EIA Inventories Forecast

The US Energy Department (EIA) is scheduled to release it weekly inventories report today and US crude oil inventories are expected to increase by 1.1 million barrels for the week ending 24th February 2012. Gasoline stocks are expected to increase by 300,000 barrels whereas distillate inventories are expected to fall by 500,000 barrels for the same period.

Precious Metals Edge Higher On Weak Us Dollar

Weakness in the US dollar helped spot gold prices to gain more than 1 percent on Tuesday, as a weaker dollar makes dollar denominated commodities look attractive for the holders of other currencies.

The yellow metal touched an intra-day high of $1789/oz and closed at the level of $1785/ on Tuesday. On the MCX, Gold April contract increased around 0.5 percent in yesterday’s trading session as sharp gains were capped due to a stronger Rupee and hit an intra-day high of Rs28,938/10 gms.

Silver

Spot silver prices rallied sharply by 4.3 percent on Tuesday, mainly taking cues from rise in gold prices coupled with upside in base metals. Silver being an industrial metal also took cues from upside in base metals yesterday.

The white metal hit a five-month high of $37.21/oz and ended its trading session at the level of $36.9/oz on Tuesday. MCX Silver March contract rose sharply by 3.7 percent and touched an intraday high of Rs61,119/kg yesterday.