Base Metals Trade On Negative Note, Nymex Crude Oil Falls 1.7%

European equities traded on a negative note before the US unemployment rate data. However, favorable German industrial production helped further downside in markets. Asian stocks ended on a negative side and US stock futures traded lower Friday. 

French Government Budget Balance was at a deficit of 69.6 billion euros in May as against previous deficit of 59.9 billion euros a month ago. French Trade Balance was at a deficit of 5.3 billion euros in May from earlier deficit of 5.8 billion in April. German Industrial Production increased by 1.6 percent in May as compared to previous decline of 2.1 percent a month ago.

Spot gold prices declined by 0.5 percent today on the back of rise in risk aversion in the global markets coupled with strength in the US Dollar Index (DX). The yellow metal touched an intra-day low of $1590.59/oz and hovered around $1594.49/oz till 4:30pm IST today. On the MCX, Gold August contract declined by 0.4 percent and was trading around Rs.29,622/10 gms today. However, depreciation in the Indian rupee cushioned further fall in prices. Taking cues from fall in gold prices along with downside in base metals, Spot silver prices also declined around 0.8 percent today.

Additionally, a stronger DX also acted as a negative factor for the commodity. The white metal touched an intra-day low of $27.31/oz and was trading around $27.43/oz today. On the domestic front, prices declined around 0.6 percent today and hovered at Rs.53,362/kg after touching an intraday low of Rs.53,268/kg today till 4:30pm IST.

The base metals pack traded on a negative note on account of negative global market sentiments along with strength in the DX. Additionally, rise in LME inventories also added downside pressure on the prices. Copper, the leader of the base metals complex, declined around 0.6 percent on the back of rise in LME copper inventories around 0.7 percent and stood at 254,450 tonnes. 

Nymex crude oil prices declined around 1.7 percent today on the back of expectations that in spite of cut in interest rates by the European policymakers the economy still faces threats from recovery of its debt crisis. Additionally, a stronger DX also lead to downside pressure on the crude oil prices. On the domestic bourses, prices declined by 0.9 percent and hovered around Rs.4779/bbl after touching an intra-day low of Rs.4767/bbl till 4:30pm IST today. However, depreciation in the Indian rupee restricted sharp downside in the prices on the MCX.

In the evening session, we expect precious metals, base metals and crude oil prices to trade lower on account of rise in risk aversion in the global markets coupled with strength in the US Dollar Index (DX). However, US economic data is expected to come on a positive note which can cushion sharp fall or even can see reversal in the prices.