Spot Gold prices traded in the positive territory today, taking cues from the weakness in the dollar. A weaker dollar prompted investors to buy bullion after the metal’s biggest drop in almost two weeks. Gold yesterday fell below $1,100 for the first time since Nov. 10 and dropped 3.4 percent, the most since Dec. 4, as the dollar index rose to a three-month high. Gold prices could take cues from the movement in the dollar. The dollar could witness strength in the short-term on the back of expectations of a rise in interest rates in the coming year. Copper prices gained 0.8% till 5.30 p.m. IST as weakness in the dollar supported the upside. LME inventories for the red metal gained 1775 tonnes. Base metals will continue to take cues from US economic data and the movement in the dollar. The complex will take cues from the dollar, movement in equities and the LME inventories. As year-end trade begins to surface, investors may book profits and base metals may remain vulnerable to further price moves in both directions. Crude Oil prices gained 1% till 5.30 p.m. IST as a weaker dollar supported an upside in the commodity. We expect oil prices to face downside pressure in the near-term as refining rates in the US continue to remain low. The dollar index is also posing strength as it has gained appeal ahead of the year-end. OPEC is scheduled to meet on 22nd Dec in Luanda, Angola. At previous gatherings this year, members have called for better implementation of the 4.2 million barrels a day of cuts announced in 2008. Outlook Gold prices will continue to take cues from the movement in the dollar. If the dollar stages a bounce back then prices could come under pressure. Copper prices too could take direction from the dollar as the currency has taken the prime position as the main driver for direction. Oil prices have staged a bounce back but demand worries could cap a sharp upside in the commodity.

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