Base Metals Trade Positive, Gold Gains On Weak Dollar Index

European equities are trading on a negative note today on the back of fall in Japan’s machinery orders which declined the most in last seven years. Additionally, unfavorable economic data from the region along with rise in Spanish 10-year bonds yield climbing to 7 percent also acted as a negative factor. Asian markets ended lower and US stock futures are trading in red. 

German Trade Balance was at a surplus of 15 billion euros in May as against previous surplus of 16.2 billion euros a month ago. European Sentix Investor Confidence declined further by 0.7 points to -29.6- mark in July from previous decline of 28.9-level in last month. Spot gold prices gained around 0.2 percent on account of weakness in the US Dollar Index (DX). 

The yellow metal touched an intra-day high of $1585.50/oz and hovered around $1585.10/oz till 4:30pm IST today. On the MCX, the gold August contract increased by 0.1 percent on the back of depreciation in the Indian rupee and was trading around Rs.29,632/10 gms after touching an intra-day high of Rs.29,665/10 gms.

Taking cues from a rise in gold prices coupled with upside in base metals complex, Spot silver prices gained around 0.7 percent today. Additionally, weakness in the DX also helped upside in silver prices. The white metal touched an intra-day high of $27.32/oz and was trading around $27.25/oz today. On the domestic front, prices rose by 0.6 percent today and hovered around Rs.53,384/kg after touching an intra-day high of Rs.53.425/kg today till 4:30pm IST. 

The base metals pack traded on a positive note today on the back of weakness in the DX coupled with a decline in LME inventories. Copper, the leader of the base metals group gained around 0.4 percent on account of decline in LME copper inventories by 0.4 percent and stood at 253,350 tonnes. In the Indian markets prices declined around 0.2 percent and was trading around Rs.427.85/kg till 4:30pm IST today. However, depreciation in the Indian rupee cushion further fall in red metal prices.

Nymex crude oil prices gained around 0.7 percent today taking cues from failure of negotiations between platform workers and management thereby increasing the expectations of halt in production in the Norway. Additionally, weakness in the DX along with supply concerns from Iran also supported upside in the prices. Crude oil prices touched an intra-day high of $85.16/bbl and hovered around $85.05/bbl till 4:30pm IST today. On the domestic bourses, prices gained around 0.7 percent and was trading around Rs.4,764/bbl today.

In the evening session, we expect precious metals, base metals and crude oil prices to trade on a positive note on the back of rise in risk appetite in the global markets coupled with weakness in the DX. Additionally, any positive comment from the European Central Bank (ECB) president to tackle the eurozone debt crisis might also act as a supportive factor for the commodity prices. In case of base metals decline in LME inventories will support upside in the prices. Crude oil prices will trade with bullish trend on account of supply concerns from Iran and failure of talks between workers and management in Norway.