COM: Gold, copper, crude oil turn weak in early trade
Spot Gold prices traded with a negative bias till 4.15 pm IST as the strength in the dollar made the yellow metal look unattractive for holders of other currencies. The dollar gained sharply against the Euro on the back of news that Greece’s credit rating may be lowered which increased concerns in the Eurozone.
The problems in Greece are becoming severe as the European Union has been pressurizing Greece to rein in its deficits but has not stated any concrete measures to rescue the ailing economy. Speculation of rise in interest rates in the US have cooled down as Bernanke in his speech to the Congress stated that low interest rates would continue for some more time to support the economy.
Copper prices declined on the LME till 4.15 pm IST after trading at a high of $7240 in the morning. Gains in the red metal were wiped out and the metal prices came under pressure as the stronger dollar made the metal look unattractive. The dollar is strengthening on the back of rising concerns in the Eurozone which is affecting the prices of commodities. Inventories of copper declined by 2450 tonnes to reach 550225 tonnes on the LME today. But this could not favor the prices as the dollar remained stronger.
Crude Oil prices traded sideways in today’s session as the dollar remained strong exerting pressure on prices of crude oil. Oil prices also took cues from the financial markets in Europe and Asia which declined on the back of rising concerns in Greece’s fiscal issues. Moreover, the US Energy Department reported yesterday that U.S. oil supplies increased by 3.03 million barrels last week to 337.5 million, the highest since November. Rising inventories of crude oil in the world’s largest consumer is increasing concerns over the demand for the commodity.
Outlook
Today the US will announce economic data comprising of core durable goods orders, unemployment claims and natural gas storage. If the economic data comes unfavorable, then the dollar may strengthen further and the commodity prices may come under pressure.
The dollar may also continue to remain strong on the back of rising concerns in the Eurozone which is affecting the investor sentiments. Crude oil prices could continue to remain under pressure as fundamentals like rising inventories in the US raise concern over demand. Gold prices will take cues from movement in the dollar. If the dollar strengthens, gold prices may come under pressure.
