Spot Gold prices recovered today and traded higher by more than 1% till 4.15 p.m. IST as weakness in the dollar made the yellow metal look attractive for holders of other currencies. Gold prices are taking cues from movement in the dollar. Prices could come under pressure if the dollar strengthens on the back of risk aversion in the financial markets. Copper prices on the LME recovered slightly as the dollar retreated. But prices continued to trade below the $7000 mark but markets remained risk-averse on economic news out of Japan and Greece that raised worries of a setback in a global economic recovery. Copper inventories climbed 5200 tonnes to a new high since April 21st. Crude Oil prices gained 0.9% till 4.15 p.m. IST as a weakness in the dollar supported the upside. Oil prices are expected to trade with a negative bias as demand worries in the US still persist. The US Energy Department is expected to show a rise in crude oil inventories by 250,000 barrels. Gasoline inventories are forecast to rise 1.6 million barrels for the last week. Supplies of distillate, a category that includes heating oil and diesel will probably show a decline of 750,000 barrels from 165.7 million the prior week. Outlook The Dollar Index could strengthen and trade with a positive bias if risk aversion takes over and leads to demand for the low-yielding dollar. This could put dollar-denomianted commodities under pressure. Sentiments in the financial markets have rattled after Japan reported growth at a slower rate than expectations in the third-quarter at 1.3% rather than 4.8%. This followed a credit downgrade to Greece and Germany’s economic data came in below expectations. Oil prices could come under pressure if oil inventories show a rise. Copper and Gold prices could take cues from the dollar and equity market movement. If the dollar strengthens then Gold and Copper prices could come under pressure.

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