Mixed Trend In Base Metals On Global Economic Concerns

The base metals complex delivered a negative performance on the LME in yesterday’s trading session.

Less-than-expected rise in US durable goods orders increased worries over the country’s economic growth and this led to weak sentiments in the markets on Wednesday.

This acted as a negative factor for the metal prices. Additionally, strength in the US dollar index also exerted further downside pressure on prices.

Copper

Copper, the leader of the base metals complex, was the worst performer on Wednesday, as the metal declined sharply by 2 percent on the LME and around 1.5 percent on the MCX.

Rising worries over slowing demand from China and a stronger dollar index exerted pressure on metal prices yesterday.

The red metal prices touched an intra-day low of $ 8,327/tonne and closed at $ 8,360/tonne on Wednesday.

MCX Copper April contract touched an intra-day low of Rs. 429.40/kg and ended at Rs. 430.70/kg yesterday.

Crude Oil To Slump On Rising Inventories

Nymex crude oil prices declined by 1.8 percent yesterday on the back of more than expected rise in US crude oil inventories which climbed the most in last 20 months coupled with a stronger dollar index.

Additionally, Western Nations proposed to release their strategic crude oil reserves in order to curb the rising fuel prices also acted as a negative factor for the commodity.

Oil prices touched an intra-day low of $ 104.67/bbl and closed at $105.41/bbl in yesterday’s trading session.

On the MCX, prices declined by 1.4 percent and closed at Rs.5,397/bbl after touching an intra-day low of Rs.5,376/bbl on Wednesday.

EIA Inventories Data

As per the US Energy Department (EIA) report released yesterday, US crude oil inventories increased sharply by 7.1 million barrels to 353.0 million barrels for the week ending on 23rd March, 2012.

Gasoline stocks dropped by 3.54 million barrels to 223.4 million barrels and whereas distillate stockpiles rose by 711,000 barrels to 135.9 million barrels for the last week.

News

US government has proposed to release its strategic oil stockpiles to curb the rising crude oil prices. The French government has welcomed the move along with US and UK.

However, France is waiting for the report from International Energy Agency (IEA) on inventories before accompanying the other Western countries.

IEA released about 60 million barrels of crude oil and its products in June after Libya’s production was disrupted.

Natural Gas Inventories Forecast

US Energy Information Administration (EIA) is scheduled to release its weekly natural gas inventory at 8.00 pm IST today and US natural gas inventories are expected to increase between 20 to 58 billion cubic feet (bcf) for the week ending on 23rd March 2012.

Precious Metals Edge Lower On Strong US Dollar

Gold prices declined sharply by more than 1 percent on the international markets yesterday, as less than expected rise in the US durable goods orders led to weak sentiments in the US markets.

Additionally, strength in the US dollar index also acted as a negative factor for commodity prices on Wednesday.

The yellow metal touched an intra-day low of $ 1654.50/oz and closed at $ 1661.57/oz yesterday. On the MCX, Gold April contract dropped around 0.5 percent, as further decline prices was cushioned on account of a weaker rupee.

MCX Gold prices touched an intra-day low of Rs. 28,106/10 gms and ended at Rs. 28,134/10 gms on Wednesday.

Silver

Taking cues from fall in gold prices coupled with strength in the US dollar index, spot silver traded lower by 1.7 percent on Wednesday. Silver being an industrial metal also took cues from downside in base metals pack.

The white metal touched an intra-day low of $31.75/oz and closed at $31.98/oz yesterday. On the MCX, Silver May contract slipped around 1.4 percent and closed at Rs. 56,578/kg after touching an intra-day low of Rs56,467/kg on Wednesday.