Precious Metals Weigh Down On Weak US Economic Data: April 23, 2012

On a weekly basis, spot gold prices declined on the back of escalating concerns over Europe’s debt crisis and weak economic data from the US which resulted choppy sentiments in the global markets in the initial part of the week. 

In the midweek, gold prices trimmed most of its losses due to positive growth forecast from the International Monetary Fund (IMF) which raised its 2012 global economic growth forecast to 3.5 percent from the previous 3.3 percent. Additionally, successful Spanish bond auctions also helped to improve market sentiments in the later part of the week which also helped gold to recover most of its losses. 

On the MCX, gold June contract rose around 0.3 percent and touched a high of Rs.28,780/10 gms last week. The Indian rupee depreciated sharply by 1 percent last week and a weaker rupee led gains on the domestic platform.

Holdings in the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, remained unchanged at 1,286.17 tonnes by 20th April 2012. While on a year-to-date basis, gold holdings rose by around 2.5 percent from the previous level of 1,254.57 tonnes on 31st December 2011.

Silver

Spot silver prices traded higher in the last week, taking cues from weakness in the US Dollar Index and revival in the global markets due to successful Spanish bond auction. Additionally, upside movement in base metals complex also helped further gains in prices last week. 

The white metal touched a high of $32.01/oz and closed its trading session at $ 31.64/oz in the last week. On the MCX, silver May contract gained around 1.2 percent as depreciation on the Indian rupee supported further rise on the domestic bourses and touched a high of Rs56,899/kg during the week.

On a week-on-week basis, holdings in the iShares Silver Trust, the world's largest silver-backed exchange-traded fund, declined by 0.4 percent to 9,552.14 tonnes by 20th April 2012 from the previous level of 9591.39 tonnes on 13th April 2012.

Crude Oil Edges Higher On Weak US Dollar

On a weekly basis, Nymex crude oil prices gained marginally by 0.2 percent taking cues from reversal pipeline news coupled with International Monetary Fund (IMF) revising its growth outlook for current year. 

Additionally, a weaker Dollar Index also helped upside in oil prices crude oil touched a high of $105.07/bbl during the week and closed at $103.05/bbl on Friday. 

On the MCX, crude oil prices gained sharply by 2.4 percent on account of a weaker rupee and closed at Rs.5,440/bbl on Friday after touching a high of Rs. 5469/bbl in last week.

News

Iraq the third largest producer of crude oil in Organization of Petroleum Exporting Countries (OPEC) has halted its crude exports from northern fields due to some technical fault. 

The nation pumped an average of 2.81 million barrels a day for the month of March and ships most of its oil from the south on tankers sailing from Gulf of Persia.

Natural Gas

Nymex natural gas prices declined more than by 3 percent in the last week on the back of rising US natural gas inventories coupled with mild spring weather. 

However, a weaker Dollar Index cushioned further fall in the gas prices. It touched a low of $1.902/mmbtu during the last week and closed at $1.93/mmbtu on Friday. On the MCX, natural gas prices declined by 2.3 percent and closed at Rs.100.7/mmbtu on Friday after touching a low of Rs.99.5/mmbtu in last week. 

Base Metals Settle Higher On Eurozone Worries

Easing worries over eurozone debt tensions in the later part of the week, successful Spanish bond auctions, revival in the global markets and weakness in the US Dollar Index helped the base metals complex to trade higher on the LME last week with nickel being an exception. 

Nickel inventories on the LME warehouses rose around 1.8 percent to 100,080 tonnes last week and this acted as a negative for nickel prices.

Copper

Copper prices rose around 2.2 percent on the LME and by 2.7 percent on the MCX last week. Fall in LME as well as Shanghai inventories and a weaker Dollar Index acted as a positive factor for red metal prices. 

Additionally, a successful Spanish bond sale and easing worries over eurozone debt tensions also helped further upside in prices.

Weekly copper inventories at warehouses monitored by the Shanghai Futures Exchange decreased sharply by 4.8 percent to 211,170 tonnes last week. 

The red metal inventories on the LME warehouses also dropped around 1.2 percent to 261,150 tonnes on 20th April 2012 from the previous level of 261,700 tonnes on 13th April 2012. Copper touched a high of $8217.75/tonne and closed at $ 8181.75/tonne last week. 

On the MCX, the copper April contract hit a high of Rs. 426.40/kg and ended its trading session at Rs. 424.8/kg last week.