MUMBAI: Commodity counters edged up during the Asian afternoon session, as US dollar steadied its rise against the euro and markets sentiments rekindled by expectation on the China GDP numbers. Some bargain buying has also helped recovery prices.
Last night, there was steady build in selling pressure on commodity futures after the US dollar rose to 5-month high against euro and as fears of tightening lending to banks.
All leading counters lost in the range of 1.5% to 4.5% - the sharpest decline in this year.
Oil prices advanced above $78 a barrel as the US dollar steadied against euro and Asian equities pared losses on expectation of improved China GDP for December quarter.
Nymex crude oil for March delivery edged up 35 cents to trade at $78.08.
The crude contract for February delivery, which expired last night, fell $1.87 to $77.15 a barrel.
Equities suffered their worst slide of 2010 on Wednesday as investors worried that bank lending restrictions in could hurt the global economic recovery.
New housing starts unexpectedly fell in December, while US producer prices rose 0.2% last month.
Investors have looked to wider economic data over the past year for signs of economic recovery and a potential rebound in energy demand.
Crude inventories likely rose for a third straight week as imports increased and refinery utilization fell with the start of the maintenance season.
Gold steadied above $1,115 per ounce on Thursday after falling more than 2% the previous day, when investors became risk averse as the US dollar rose and 's tightening bank lending capped economic optimism.
Market participants were eagerly awaiting a set of Chinese economic indicators on Thursday, including CPI and gross domestic product data.
Spot gold was at $1,116.35 an ounce, up 0.6% from New York’s notional close of $1,111.10. It fell as low as $1,107 on Wednesday; it’s lowest since January 4.
US gold futures for February delivery were at $1,117.10 an ounce, up 0.4%.
On Wednesday, the contract settled down $27.40 at $1,122.60 on the COMEX division of the New York Mercantile Exchange.
The world's largest gold-backed exchange-traded fund, SPDR Gold Trust, said its holdings stood at 1,111.92 tonnes as of January 20, unchanged from the previous business day.
Base metal counters continue to remain under pressure in Asian trading session as stronger US dollar and concerns over global economic recovery weighed on prices.
However, initial trades on electronic platform were indicated higher. Markets are watching for key economic data release from.
Meanwhile, London Metal Exchange (LEM), experienced liquidation pressure last night.
Three-month copper on the LME fell $170 to close to $7,375 a tonne on Wednesday, but recovered to $7,420 in after-hours trading.
When Shanghai closed on Wednesday, LME copper stood at $7,518.75 a tonne. The contract last quoted at $7,450 a tonne, up $25.
Investors are eyeing a series of economic data out of Beijing later on Thursday, including industrial output, economic growth, and detailed trade figures, expected to show the world's third-largest economy gathered strength in December.
Meanwhile, the global copper market was in a surplus of 191,000 tonnes in January to November of 2009, down from 205,000 tonnes in the same period of 2008, the World Bureau of Metals Statistics (WBMS) said.
The International Copper Study Group said the surplus in January to October of 2009 was 78,000 tonnes. Zinc surplus stood at 424,000 tonnes in the first 11 months of 2009, and lead surplus 58,000 tonnes, research groups said.
The domestic commodity futures traded cautiously amid upside bias, as rupee weakened against the US dollar, raising commodity investment appeal.
On MCX, crude oil contract for near-month settlement was last quoting at Rs 3,599 a barrel, off early highs of Rs 3,602. The contract had commenced the session at Rs 3,601 a barrel.
Precious metal counters traded flat for most of the morning session. MCX Gold for February settlement opened the session at Rs 16,674 per 10 gram.
It touched a high of Rs 16,687, before returning to current level of Rs 16,683 per 10 grams.
MCX Silver March settlement contract traded 0.2% higher at Rs 27,837 per kg, after having opened the session at Rs 27,853.
Base metal counters reversed previous days declining trend ahead of key economic data release. Copper, nickel led the gain in metal prices.
MCX copper for February settlement traded 1% higher at Rs 344.50 per kg. MCX zinc January contract added 0.6% to trade at Rs 113.30 a kg.
