Precious, Base Metals Down On Weak Global Sentiments

European equities are trading on a negative note on the back of weak global market sentiments caused by reports of slowdown in the global economy. Asian markets ended lower and US stock futures are trading in red.

India’s Industrial production raised more than expected by 2.4 percent in May against a previous decline of 0.9 percent in April. Consumer goods increased by 4.3 percent in May from previous rise of 3.7 percent a month ago. Consumer durables goods activities rose by 9.3 percent in May while non-durable goods increased at the slow pace of 0.1 percent during the same period. 

Capital goods declined by 7.7 percent in May as compared to rise of 6.2 percent in the prior month. Manufacturing activity rose at a slow pace of 2.5 percent in May with respect to rise of 6.3 percent in April. European Industrial Production rose by 0.6 percent in May from previous decline of 1.1 percent a month ago.

Spot gold prices declined around 0.8 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 intraday low of $1561.19/oz and hovered around $1564.26/oz today till 4:30pm IST. On the MCX, Gold August contract  traded on a flat note and  was trading at Rs.29,255/10 gms. However, depreciation in the Indian rupee cushioned sharp fall in prices.

Spot Silver prices declined by 1.5 percent today taking cues from fall in gold prices along with downside in base metals group. Additionally, a stronger DX also exerted downside pressure on Silver prices. The white metal touched an intraday low of $26.60/oz and was trading around $26.69/oz today. On the domestic front, prices declined by 0.5 percent and hovered around Rs.52,466/kg till 4:30pm IST today.

The base metals pack traded on a negative note on account of weak global market sentiments along with strength in the DX. Copper, the leader of the base metals complex declined around 1.2  percent and hovered around $7,484.75/tonne on the LME. However, sharp downside in prices was restricted on the back of decline in LME copper inventories by 0.4 percent and stood at 251,375 tonnes. 

Nymex Crude oil prices declined around 1.4 percent today on the back of expectations that global economy is slowing, leading to the fall in demand for the fuel. Additionally, a stronger DX also exerted downside pressure on the Crude oil prices. It touched an intraday low of $84.46/bbl and hovered around $84.62/bbl till 4:30pm IST today. 

In the evening session, we expect precious metals, base metals and crude oil prices to trade on a negative note on the back of weak global market sentiments coupled with strength in the DX. Additionally, expectations of unfavorable jobless claims will add further downside pressure on the prices.