COM: Gold, copper gain marginally, crude oil steady
Spot Gold prices gained marginally in today’s trading session till 5 pm IST as the dollar remained firm after weakening in the last week. Demand for the yellow metal as a safe haven investment emerged on concerns that Greece’s debt burden may falter the economic recovery.
The US markets remain closed today on account of President’s Day holiday. However, European finance ministers meet today under pressure from investors to spell out concrete measures to rescue Greece. Gold prices will take cues from movement in dollar. A stronger dollar usually exerts pressure on gold.
Copper prices gained marginally in today’s session after weakening at the end of last week amidst the Chinese measures to increase the reserve requirements of banks coupled with the New Year week-long holiday in China and rising inventories on LME reflecting decreasing demand. Copper inventories increased today by 1350 tonnes to reach 5,49125 tonnes.
Low demand for the red metal is expected because of the Chinese holiday and the hike in reserve requirements as China is the largest consumer of metals in the world. Moreover, the European officials summit last week was unable to come up with a concrete plan to rescue Greece and other ailing nations and hence risk aversion may emerge back.
Crude Oil prices traded sideways on the MCX as China, which is the second largest consumer of energy hiked its reserve requirements by banks for the second time. This may result in lower demand from the country.
There was some update from a Saudi adviser that US, which is the largest consumer of crude oil aims to cut oil imports. The U.S. Department of Energy reported that crude oil inventories in US increased by 2.42 million barrels to 331.4 million barrels last week, which were more than the forecasts. Moreover, Chinese week long holiday on account of New Year Celebrations may see demand weakening and prices coming down.
Outlook
The US markets remain closed on account of President’s Day holiday today. Chinese markets would also remain closed till the end of this week. But, the European ministers would meet today to come up with some solution to help Greece. A host of economic data releases from US are scheduled later this week comprising of PPI, CPI, unemployment claims etc.
Metal prices would take cues from the outcome of meetings of European officials and the economic data releases. The dollar may strengthen back on rising concerns in the Eurozone. Gold, copper and crude oil prices will take cues from movement in dollar.
