Crude Oil Crashes Further, Base Metals Trade Negative

European equities are trading on a negative note today on the back of surplus in German trade balance coupled with Fitch downgraded the Spain’s credit rating. Asian markets ended lower and US stock futures are also trading in red. 

Fitch credit rating agency downgraded Spain’s credit rating by two notches to BBB from A. German Trade Balance was at a surplus of 16.1 billion euros in April as against previous surplus of 14 billion euros a month ago.  

Spot Gold prices declined around 0.7 percent on the back of strength in the US Dollar Index (DX). The yellow metal touched an intra-day low of $1561/oz and hovered around $1578/oz till 4:30pm IST today. On the MCX, Gold August contract gained by 0.2 percent on account of depreciation in the Indian rupee and was trading around Rs.29,374/10 gm today.  

Taking cues from fall in gold prices coupled with downside in base metals complex, Spot silver prices declined by more than 1.1 percent today. Additionally, strength in the DX exerted further downside pressure on silver prices. The white metal touched an intra-day low of $27.93/oz and was trading around $28.23/oz today. 

On the domestic front, prices declined by 0.4 percent as depreciation in Indian rupee prevented further fall in prices and hovered around Rs.53,860/kg after touching an intra-day low of Rs.53,557/kg till 4:30pm IST today. 

The base metals pack traded on a negative note today on the back of rise in risk aversion in the global markets coupled with strength in the DX. The red metal prices declined more than 2.5 percent and hovered around $7,282/tonne on the LME till 4:30pm IST today. In the Indian markets prices declined by 1.7 percent and were trading around Rs.404/kg today. 

Nymex crude oil prices declined around 3 percent today on account of expectations of slowdown in US and China which will curb the demand for the fuel. Additionally, a stronger DX also acted as a negative factor for the commodity.  

Crude oil prices touched an intraday low of $82/bbl and hovered around $82.29/bbl today. On the domestic bourses, prices declined around 2.4 percent and were trading around Rs.4,582/bbl till 4:30pm IST today. However, depreciation in the rupee restricted further fall in crude oil prices.

In the evening session, we expect precious metals, base metals and crude oil prices to trade with a negative bias on the back of rise in risk aversion in the global markets coupled with strength in the DX. Additionally, US Trade Balance is expected to come  on a negative note which will further exert downside pressure on the commodities.