Spot Gold prices traded steady on Friday after retreating from a record high the previous day. Yesterday, oil prices retreated from a high of $1,122/oz as a bounce back in the dollar made the yellow metal look unattractive for holders of other currencies. Though there are other fundamentals like a rise in investment demand from global central bankers and concerns over inflation which is pushing gold prices higher, even slight strength in the dollar can out selling pressure on gold prices. Copper prices gained 0.8% till 4.30 p.m. IST as a softer dollar provided support. A sharp downside in copper is protected by the ongoing supply issues and labour concerns. But the market seems to be torn between conflicting signals from the fundamentals side, particularly inventory developments. A strike at the Antamina copper and zinc mine in northern Peru is looking more likely, with almost half of unionised workers there voting against a final contract offer from management. At BHP Billiton's Spence mine in Chile, employees have called for management to accept their offer to halt the strike that has now lasted for more than a month. Crude Oil prices recovered in today’s trade as a weaker dollar came to the downside support. The US Energy Department yesterday showed a rise of 1.8 million barrels in crude oil stocks last week. Gasoline inventories rose 2.56 million barrels to 210.8 million, higher than a forecast drop of 350,000 barrels. There has been a sharp build up in inventories and this factor led to the sell-off in crude oil. Though the fundamentals in the case of crude oil may not be bullish, oil prices could get support of a weaker dollar. Outlook The Dollar Index is trading on the weaker side and has helped the dollar-denominated commodities recover from yesterday’s sharp downslide. Gold prices could trade with a positive bias as the dollar is trading weak. If risk appetite remains firm ahead of the weekend then Gold prices could end the week on a strong footing. Fundamentals in the case of crude oil may not be bullish but a sharp downside will be protected due to weakness in the dollar. Copper prices will continue to receive support from the ongoing labour issues and weakness in the dollar could add fuel to the upside. Consumer sentiment data from the US is expected at 8.25 p.m. IST and is expected on the positive side. This could boost risk appetite and lead to higher Gold, Copper and Crude Oil prices.

Source