COM: Gold, copper, crude oil slides down as dollar gains
Spot Gold prices slipped 0.5% till 4.15 p.m. IST as strength in the dollar weighed on prices. Prices also came under pressure as profit-booking came in at higher levels. Holdings in the SPDR Gold Trust, the biggest exchange- traded fund backed by the metal, dropped yesterday for a second time this week to 1,126.48 metric tons. Prices also declined as a pause in the dollar’s weakness diminished the yellow metal’s appeal as an alternative investment.
Copper prices eased back from yesterday’s multi-month highs as strengthening in the dollar dampened the buying spree. But supply concerns due to bad weather in China continued to provide downside support. Poor weather conditions in China could hamper production of metals such as zinc and lead and reduced access to coal could impair aluminum production. LME inventories for copper gained 75 tonnes and currently stand at 507,475 tonnes.
Crude Oil prices declined 0.5% till 4.15 p.m., snapping ten days of gains on speculation that rising US supplies will be enough to withstand the cold snap. Prices could come under pressure as the US Energy Department showed an unexpected rise in stockpiles. As per the data, oil inventories gained 1.3 million barrels last week. Supplies of distillate, a category that includes heating oil and diesel slipped 233,000 barrels to 159 million. Fuel consumption in the US declined 1.6% to 18.8 million barrels a day last week.
Outlook
The US is expected to announce economic data on unemployment claims at 7.00 p.m. IST today. If the data comes on the negative side then prices could come under pressure as it would again raise concerns over the US economic recovery. Demand concerns in the case of Crude Oil could bounce back as inventories have shown a bearish scenario.
Consumption in the US still remains weak and oil prices could come under pressure. Supply concerns from China on the back of cold weather could provide support to base metal prices but sharp gains could be capped on the back of strength in the dollar. Gold prices could trade with a negative bias if strength in the dollar persists.
