Spot Gold prices traded sideways till 4.30 pm IST today after breaching the highest prices in almost two weeks yesterday. Gold prices gained yesterday on the back of improved risk sentiments in the financial markets. Investors were seen flocking towards riskier investments which weakened the low-yielding dollar and pushing up the prices of gold. Positive economic data releases from Germany and US yesterday led to improved confidence on global economic recovery which led to boost in risk sentiments of investors. However, the European Union has not yet declared on how it would aid Greece and other ailing nations in the Eurozone to overcome its deficit problems. Risk aversion may emerge back if they fail to devise a proper plan which may strengthen back the dollar. Gains in gold prices may be capped if the dollar rebounds back. A stronger dollar usually exerts pressure on gold. Copper prices gained marginally today after closing above $7000 mark yesterday. The red metal has been gaining amidst improved confidence amongst investors. Inventories of copper on LME remain unchanged today at 5,49,900 tonnes after increasing in the earlier sessions reflecting improved demand. However, prices may be capped on the upside as Chinese markets remain closed till this weekend and hence would lower demand from the world’s largest consumer of metals. Moreover, the European Union has not yet declared on its ways to help Greece which can hurt investor’s risk appetite. Crude Oil prices remained a little changed above $77 today after gaining yesterday amidst the weakening dollar coupled with positive economic data releases from US, Japan and Germany. The dollar weakened against the Euro on speculation that Greece won’t need a bailout to overcome its deficit problems. US Secretary of State Hillary Clinton said yesterday that the US is seeking support from countries to back sanctions against Iran which would help prices to gain. However, the US Energy Department will release data on crude inventories tomorrow. Inventories have been on an increase till last week. Outlook The US is expected to announce a host of economic data on Building Permits, Housing Starts and Industrial Production today. If the data comes on the positive side then prices may further rise on hopes of an improving economic scenario. Currently, weakness in the dollar is leading to an upside in prices of dollar-denominated commodities. But further direction to prices will come after the economic data releases from the US today. Crude prices today will take cues from US economic data releases today and further on the inventories data to be released tomorrow. Gold prices will take cues from movement in dollar.

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