Commodities Gain, LME Metals Deliver Good Performance

European markets erased its earlier gains after Greeks lenders retreated today, thus overshadowing China’s positive economic data. The country’s HSBC Flash Manufacturing Purchasing Managers' Index (PMI) rose to 51.1level in October as compared to 49.9mark a month earlier, surpassing the 50-point level for the first time since July.

Euro Zone Flash Manufacturing Purchasing Managers' Index (PMI) stood at 47.3-level in October as against 48.5-mark in September. Flash Services PMI index in the Euro Zone also dropped to 47.2-mark in October as compared to 48.8 in September. Industrial new orders increased by 1.9 percent in August as against a decline of 1.6 percent in July.

Today, gold prices gained around 0.8 percent today, on account of choppy sentiments in the global markets which boosted safe-haven demand for gold. Prices touched an intra-day high of $1657/oz and were trading at $1653/oz till 4.45 pm IST. On the MCX Gold December contract rose 0.7 percent on and touched an intra-day high of Rs.26,897/10 gms till 4.45 IST today.

Taking cues from rise in gold prices coupled with upside in base metals, spot silver prices also gained around 1.2 percent till 4.45 pm IST. The white metal touched an intra-day high of $31.74/oz and was trading at the level of $31.65/oz till 4.45 pm IST. MCX silver also witnessed gains of around 1.1 percent and was hovering around Rs.53,388/kg till 4.45 pm IST.

The base metals complex delivered good performance on the LME today. Positive manufacturing data from China, the world’s largest metal consumer, helped metals to gain. Copper was the top performer of the day, as it gained almost 3.5 percent on the LME and around 2.4 percent on the MCX till 4.45 pm IST. The red metal inventories declined almost 1 percent to 444,275 tonnes on the LME warehouse which supported copper prices.

Nymex crude oil gained more than 0.4 percent today, on the back of rising expectations of positive outcome from the second summit on Wednesday coupled with favorable manufacturing data from China. Oil prices are currently trading at $87.78/bbl after touching an intra-day high of $87.87/bbl. On the MCX, crude oil prices increased by 0.3 percent and were hovering around Rs.4383/bbl after touching an intraday high of Rs.4421/bbl till 4.45 pm IST.

Outlook

Gold is expected to trade on a positive note today, on account of choppy sentiments in the global financial markets which will boost safehaven demand for gold.

We expect silver to trade higher today, taking cues from upside in gold prices and mixed sentiments in the global markets. However, sharp gains will be cap due to a stronger dollar.

We expect crude oil and base metals to trade with sideways bias today, taking mixed cues from favorable manufacturing data from China, dollar strength and choppy market sentiments.