Base Metals Trade Lower, Spot Gold Falls Marginally

European equities are trading on a negative note on account of the escalating eurozone debt crisis. Asian markets ended lower and US stock futures are trading in the red. Italian Trade Balance was at surplus of 1.01 billion euros in May as against previous deficit of 0.2 billion euros a month ago. Consumer Price Index (CPI) remained unchanged at 2.4 percent in June.

Core CPI also remained unchanged at 1.6 percent in last month. European Trade Balance was at surplus of 6.3 billion Euros in May from previous surplus of 6.2 billion euros in earlier month. Spot gold prices declined around 0.2 percent today on the back of rise in risk aversion in the global markets. Additionally, strength in the US Dollar Index (DX) also exerted downside pressure on the gold prices.

The yellow metal touched an intra-day low of $1582.39/oz and hovered around $1584.39/oz today till 4:30pm IST. On the MCX, Gold August contract traded on a flat note on account of depreciation in the Indian rupee and was trading around Rs.29,287/10 gms today. Taking cues from fall in gold prices coupled with downside in base metals, Spot silver prices declined around 0.8 percent today. Additionally, a stronger DX also acted as a negative factor for the commodity.

The white metal touched an intra-day low of $27.05/oz and was trading around $27.07/oz today. In the Indian markets prices declined by 0.4 percent and hovered around Rs.52,602/kg and touched an intra-day low of Rs.52,413/kg till 4:30pm IST today. The base metals pack traded lower today on the back of weak global market sentiments along with strength in the DX.

Copper, the leader of the base metals declined around 0.8 percent today on account of strength in the DX coupled with negative global markets. However, sharp downfall in prices was cushioned as a result of decline in LME copper inventories.

The red metal touched an intra-day low of $7,650.25/tonne and hovered around $7656/tonne today till 4:30pm IST. On the domestic front, prices declined around 0.1 percent and were trading around Rs.425.85/kg today. Depreciation in the Indian rupee restricted sharp fall in prices on the MCX.

Nymex crude oil prices declined around 0.5 today on the back of expectations that world’s second largest economy China has no momentum and will lead to curb in demand for the fuel. Additionally, a stronger DX also added downside pressure in crude oil prices. On the domestic bourses, prices traded on a flat note on account of depreciation in the Indian rupee.

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 along with strength in the DX. However, US economic data is expected to come on a positive note which can cushion a sharp fall or even a reversal in commodity prices.