Nymex Crude Oil Trades Flat, Base Metals Weaken

European equities are trading on a flat note with slight upside on the back of a more-than-estimated rise in profits of major banks like Credit Suisse and Nordea Bank. Asian markets ended lower and US stock futures are trading in the red.

Spot gold prices declined 0.14 percent today owing to no clear hint of stimulus measures from the Federal Reserve along with strength in the Dollar Index. The yellow metal touched an intraday low of $1,575/oz and hovered around $1579.10/oz today till 4:30pm IST. On the MCX, gold August contract traced the spot prices and traded on a negative note and was trading around Rs.29,244/10 gms today.

Depreciation in the Indian rupee however, cushioned sharp fall in the prices in the MCX gold. Taking cues from weakness in the gold prices and base metals pack spot silver also declined 0.1 percent today.

Further, strength in the Dollar Index also pressurized silver prices on the downside. Silver prices touched intraday low of $27.265/oz and are trading around $27.265/oz today. In domestic markets too prices declined 0.42 percent and hovered around Rs.52,669/kg and touched an intraday low of Rs.52,650/kg till 4:30pm IST today.

The base metals pack traded on a negative note on the back of weak global market sentiments coupled with strength in the DX. Additionally, rise in LME inventories also acted as negative factor for the prices. Copper, the leader of the base metals group declined around 0.3 percent today as LME copper inventories rose by 0.3 percent and stood at 253,575 tonnes which exerted downside pressure on copper prices.

The red metal touched an intraday low of $7,595/tonne and hovered around $7,602/tonne today till 4:30pm IST. On the domestic front, prices gained around 0.2 percent on the back of depreciation in the Indian rupee and were trading around Rs 423.75/kg today. Nymex crude oil prices traded on a flat note today on the back of expectations that demand for fuel will curb in world’s second largest economy China after the statement of Premier Wen Jiabao that labor situation is expected to worsen coupled with strength in the DX.

However, a sharp downside in prices was cushioned on account of expectations of decline in US crude oil inventories. The US Energy Department (EIA) is scheduled to release its weekly inventories report today at 8:00pm IST and US crude oil inventories are expected to have decline by 1.2 million barrels for the week ending on 13th July 2012.

In today’s session we expect precious metals, base metals and crude oil prices to trade range-bound owing to risk aversion in global markets along with strength in the DX. However, any positive statement from the Federal Reserve policy makers might provide support to the prices. Crude oil prices will find support owing to an expected decline in the US crude oil inventories.