MUMBAI: Overcoming early jitters, the commodity counters bounced back into a positive zone as the US dollar weakened against the basket of currencies. Apart from positive cues from the currency markets, investor sentiment was also perked up by stronger trend in global equity markets. Hopes of global economic recovery have infused a fresh lease of life in equity markets. Initial data from the US and Europe have shown encouraging trend and investors are hoping for further improvement in the condition of the world's largest economy.
Meanwhile, expectations on crude oil inventory data have been influencing oil prices for now. In fact, US crude futures slipped towards $77 a barrel in early trade. The contract had settled $2.80 higher on Tuesday after an industry report showed a bigger than expected build in US crude oil stockpiles last week. NYMEX crude for March delivery was last quoting 7 cents up at $77.30 a barrel.
US crude inventories surged by 4.7 million barrels last week as imports rose, weekly data from the American Petroleum Institute showed late on Tuesday, much larger than a 200,000 barrel rise projected by analysts. The Energy Information Administration (EIA), a government organisation, will release its own weekly oil statistics later on Wednesday.
Gold prices surged higher near $1,125 an ounce as euro – the currency of 16 nation European region – strengthened against the dollar. Rise in risk appetite has led to a fall of greenback and which in turn benefited gold and other precious metal counters. Also, the sudden rise in physical demand for gold led to a rise in prices.
Spot gold inched 0.4% up to $1,117.75 per ounce compared to New York 's notional close of $1,113.95. Earlier in the day it hit a high of $1,124.45, the highest since January 20. US gold futures for April delivery were down marginally at $1,117.70 an ounce after rising $13 on Tuesday on the COMEX division of NYMEX.
The world's largest gold-backed exchange-traded fund, SPDR Gold Trust said its holdings stood at 1,111.92 tonne as of February 2, unchanged since January 19.
Base metal counters have managed to reverse declining trend and are seen trading strong in the last two sessions on the back of strong economic data from the and European region. Three-month copper on the London Metal Exchange (LME) rose $29 to close at $6,820 a tonne on Tuesday, and extended gains to $6,853.75 in after-hours trading. LME copper last stood at $6,880 a tonne, up $30. LME copper hit $6,600 a tonne on Monday, its lowest since mid November, having tumbled as much as 15% in the previous three weeks.
Pending sales of previously owned homes edged up as expected in December, a survey showed, allaying some fears of renewed weakness in the troubled sector.
That came on the heels of a string of positive GDP and manufacturing numbers since Friday.
The domestic commodity maintained steady trend following the global markets. On MCX, crude oil contract for near-month settlement was last quoting 0.3% stronger at Rs 3,563 a barrel, not far from its early high of Rs 3,564. The contract started the session at Rs 3,550.
MCX Gold for February settlement opened lower at Rs 16,600 per 10 gram. After a brief rise towards Rs 16,720, the contract retraced to current level of Rs 16,610 per 10 grams. MCX Silver March settlement contract traded 0.2% higher at Rs 26,106 per kg, after having opened the session at Rs 26,080.
Base metal counters have also opened in the positive zone. Copper strengthened further, leading the entire metal complex higher. MCX copper for February settlement traded 0.1% higher at Rs 315.85 per kg. MCX zinc February contract retraced from highs and was last quoting 0.1% higher at Rs 99.70 a kg.
