COM: Gold eases on dollar strength; copper, oil also dip
Spot Gold prices traded 0.7% lower till 4.00 p.m. IST and hovered around $1,130/oz levels. Prices eased from the record high of $1,143/oz as on the back of dollar strengthening that made the yellow metal look unattractive for holders of other currencies.
The Dollar Index gained 0.4% after touching a low of 74.68 yesterday. This technical rebound in the dollar put pressure on dollar-denominated commodities. Spot Silver prices fell 1.4% till 4.00 p.m. IST as the stronger dollar exerted pressure on the commodity.
Copper prices declined 1% till 4.00 p.m. IST, pausing for breath after the previous session’s sharp rally and awaiting fresh direction from the dollar. Copper prices gained 5% on Monday but slipped today as selling pressure reeled in to book profits and a stronger dollar also put pressure on the downside.
Copper inventories gained 3,550 tonnes to 410,000 tonnes, the highest since April 29 of this year. But cancelled warrants, the metal booked for removal jumped 37.5% to 2,200 tonnes, pointing towards a possible stock decline ahead.
Crude Oil prices slipped 0.6% in today’s trading session as strength in the dollar reduced the appeal of the commodity. Also, profit-booking after a sharp rally yesterday put pressure on prices. Traders will wait ahead of the American Petroleum Institute (API) inventory data due later this evening. US crude oil inventories could show a rise in the last week as imports probably edged up, despite minimal disruptions in offloading operations in the wake of Tropical Storm Ida.
Outlook
The US is expected to announce a host of economic data today – PPI, Core PPI, Long-Term Purchases, capacity utilization rate, industrial production and NAHB Housing Market Index. The data is expected to come on the mixed side and may have a negative impact on prices. We expect the dollar index to trade on a stronger note today on the back of technical support.
If the data is not supportive then the dollar could continue to gain and put pressure on Gold, Copper and Crude Oil prices. Crude oil will take cues from the release of API inventory data which is expected to rise. Gold prices will take cues from the movement in the dollar. We expect Gold, Copper and Crude oil to trade with a negative bias today.
