Spot Gold prices traded around $1,090/oz levels today after its rally to a record high this week on the back of anticipation of renewed central bank demand. But investors are also looking at economic data from the US for further direction. The US is expected to announce data on unemployment rate today and it is expected to come on the weak side. This negative data could again raise concern over the progress of the economic recovery. Prices came under pressure yesterday as the yellow metal has raced too far too fast and profit-booking at higher levels is inevitable. We expect gold prices to face pressure on the downside as negative labour data from the US could reduce risk appetite and bring in profit-booking further. Copper prices gained almost 1% today till 4.00 p.m. IST as a weaker dollar coupled with supply worries in the red metal cushioned the downside. On a year-to-date basis, Copper prices have risen more than 100% and are currently trading at $6,595. Copper prices are cushioned by supply worries despite rising inventories. Though the bulls are heavily reliant on the weaker dollar for a rally further, the red metal has support in terms of labour disputes. We expect copper prices to trade with a positive bias but a sharp upside will be capped on the back of weak unemployment rate from the US due at 7.00 p.m. IST. Crude Oil prices hovered around $80/bbl as a weaker dollar supported the upside. But markets await the economic data on unemployment rate which is expected today at 7.00 p.m. IST. Prices could come under pressure today and face resistance around $80/bbl as poor unemployment rate data could reduce risk appetite and lead to selling pressure. Outlook The US is expected to announce economic data on unemployment rate, non-farm employment change and average hourly earnings today. Unemployment rate is expected to rise to 9.9% in October against 9.8% the previous time. If the data comes in as per expectations then it would lead to risk aversion in the financial markets and increase demand for the dollar. A stronger dollar could put pressure on dollar-denominated commodities. We expect the Dollar Index to rise today as a rise in unemployment would mean that the US economy still has a long way to go. This would lead to risk aversion in the financial markets and thereby higher demand for the safe-haven dollar. A stronger dollar could put pressure on dollar-denominated commodities like Gold, Copper and Crude Oil. However, the downside in Copper is supported by supply issues and even Gold prices have support of investment demand from central bankers. Since fundamentals in the case of crude oil are subdued, oil prices could face pressure on the downside.

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