Gold, Silver Rise On Weak Dollar, Crude Oil Slightly Up: April 24, 2012

European markets traded higher today as investors awaited for US consumer confidence and home sales data to be release later in the evening. Asian markets ended on a mixed note and US stock futures are trading in a positive territory.

European industrial new orders declined by 1.3 percent in February as against a previous decline of 2.9 percent a month ago. Spot gold prices traded slightly higher by 0.1 today on the back of weakness in the US Dollar Index. The yellow metal touched an intra-day high of $ 1640.10/oz and was trading at $ 1638.16/oz today till 4:30pm IST. On the MCX, Gold June contract increased around 0.3 percent on account of depreciation in the Indian rupee and hovered at Rs. 28,872/10 gms till 4:30pm IST today.

Taking cues from rise in gold prices and upside in base metals complex, spot silver prices gained by 0.2 percent till 4.30 pm IST. Additionally, a weaker Dollar Index also acted as a supportive factor. The white metal touched an intra-day high of $ 30.90/oz and hovered at $ 30.82/oz till 4:30pm IST today. On the MCX, silver prices rose around 0.5 percent and were trading at Rs. 55,848/kg today till 4:30pm IST.

Revival in the European markets ahead of US economic data coupled with weakness in the US dollar index helped base metals pack to trade higher on the LME today. Copper, the leader of the base metals complex, rose around 0.6 percent on the LME and as well as on the MCX till 4.30 pm IST.

Falling LME inventories of copper which decline around 0.8 percent to 256,875 tonnes today acted as a supportive factor for the red metal prices.Nymex crude oil prices are trading slightly lower today on account of an expected rise in US crude oil inventories coupled with slowdown in China’s crude oil demand.

However, further decline was cushioned due to a weaker dollar index. However, MCX crude oil prices gained by 0.3 percent and were trading at Rs. 5457/bbl till 4.30 pm IST today. The American Petroleum Institute (API) is scheduled to release its weekly inventories today and US crude oil inventories are expected to increase by 2.9 million barrels for the week ending on 20th April 2012.

Revival in the global markets ahead of US consumer confidence and home sales data will lead to weakness in the US Dollar Index today. Taking cues from this, we expect precious metals and base metals to trade higher in the evening session.

US home sales data is expected to be on a positive note and if the data come as expected then this will further lead to rise in base metal prices. However, Europe’s debt worries still persist and any negative news or development from the eurozone front may lead to reversal in the markets. In case of crude oil, expected rise in US crude oil inventories and decline in China’s crude oil consumption will exert downside pressure on oil prices.