Spot Gold prices rose above $1,120/oz to hit a record high of $1,122.90/oz till 4.00 p.m. IST as investors bought the metal to hedge against the trend of weakening in the dollar. Gold is also seen as a hedge against energy-led inflation. But a further rise in the yellow metal could be weighed as Barrick Gold’s chief executive said that there could be a sell-off in gold. This could lead to some caution in the market. Also, a lack of rise in holdings of the gold-backed exchange traded fund is also underlying that mood. Copper prices declined almost 1% on the LME till 4.00 p.m. IST as a stronger dollar put pressure on the red metal. Copper found very little inspiration from the Chinese data released yesterday. But Copper prices could get cushioned by the South American labour concerns. A long-running strike at BHP Billiton’s Spence mine in Chile is still continuing and providing an upside to prices. Workers at Antamina, a major copper mine in Peru also said that contract talks with the company had broken down and they could prepare to strike. Though Chinese imports data of copper indicates a negative side for copper, supply-related issues come to the rescue. Crude Oil prices traded lower by almost 1% today before a government report today which is expected to show that US crude oil stockpiles rose last week. The US Energy Department is expected to release its weekly inventory report today at 9.30 p.m. IST. It is expected to show a rise in crude oil inventories by around 1 million barrels last week as imports increased. This factor could have a negative impact on prices. The report is expected to show that gasoline supplies declined 350,000 barrels and stockpiles of distillate fuel, a category that includes heating oil and diesel may fall 700,000 barrels. Outlook The US is expected to announce economic data on unemployment claims at 7.00 p.m. IST today. Treasury Secretary Geithner is also expected to give his speech at 10.00 p.m. IST today. Unemployment claims are expected to remain stagnant but we feel that the rising unemployment scenario in the US could boost this data. If the data comes on the negative side then the Dollar Index could continue to trade stronger as demand for higher-yielding and riskier investment assets could come down for the time-being. Gold prices may come under pressure today as bearish comments by Barrick Gold’s executive; the world’s biggest gold producer may weigh on prices. We do not expect a sharp downside in Copper as labour worries will provide a cushion to the downside. But crude oil prices could trade with a negative bias as oil stocks could rise and lead to worries over demand. If the dollar continues to strengthen then selling pressure in dollar-denominated commodities could come in.

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