RTRS: Gold, Copper, Oil prices slip on strong dollar
Spot Gold prices slipped in today’s trade by 1% till 5.00 pm IST as a stronger dollar sapped demand for gold as an alternative investment. The US dollar strengthened on the back of risk aversion in the financial markets as concerns over economic recovery loomed in. But overall the dollar has declined as interest rates in the US are expected to remain low for an extended period. This downside in gold prices may be limited as weakness in the dollar could spur buying in the yellow metal again.
Copper prices traded lower by almost 1% till 5.15 pm IST as a steadier dollar and some concerns over the pace of the US economic recovery put pressure on prices. Business in the base metals complex is expected to become more volatile on the back of economic data announcements and also on the back of the annual rebalancing exercise by major commodity index funds. Inventories of copper on the LME continue to gain as they rose 1500 tonnes today to touch 525,475 tonnes.
Crude Oil prices slipped for the fifth day in a row as demand concerns for the commodity coupled with strength in the dollar put pressure on prices. Strength in the dollar curbed demand for crude oil as a currency hedge. Prices are also trading lower as oil inventories gained sharply last week and the winter in the US is expected to get mild over the week.
Outlook
Copper prices could witness downside pressure on concern that a slowdown in Chinese bank lending could dampen growth in the world’s third-biggest economy. Oil prices could trade with a negative bias as a rise in oil inventories last week, milder winter in the US and CFTC regulations could lead to selling pressure in the commodity.
Oil prices could also trade lower as risk aversion in the financial markets could lead to lower demand for higher-yielding and riskier investment assets. A stronger dollar could put pressure on gold prices, making the yellow metal look expensive for holders of other currencies. US is expected to announce a host of economic data today and if data comes on the positive side then it could help limit losses in Gold, Copper and Crude Oil prices today.
