COM: Gold, crude oil gains copper flat in early trade
Spot Gold prices gained today till 4.00 pm IST, as the dollar weakened and paved way for the yellow metal prices to wipe out earlier losses of the week. Risk sentiment has emerged in the financial markets and investors are flocking towards high-yielding and riskier investment.
The dollar index fell below the crucial 80-mark against the basket of six major currencies touching a low of 79.72 till 4.00 pm IST today. Positive economic data from the US yesterday coupled with improving sentiments in the financial markets is weakening the low-yielding dollar.
Copper prices traded on a flat note with less robust on the upside as concerns over demand prospects from China after it’s tightening of monetary policy capped gains. The latest series of aftershocks in Chile have failed to disrupt mining operations. Copper inventories on the LME declined 3,075 tonnes to 532,575 tonnes today but Shanghai inventories for copper gained 6,849 tonnes. Number of cancelled warrants is rising currently and warehouse inventories are showing signs of topping out. This factor could favor prices on the upside.
Crude oil prices gained today till 4.00 pm IST today on the back of a weaker dollar. Moreover, crude prices also received support from the news that OPEC may increase shipments to China on strong demand from the second largest consumer. However, this positive sentiment can be faded to some extent on growing concerns in China that the central bank may increase interest rates very soon to curb inflation and to control the growing real estate prices.
Outlook
Today, the US is expected to announce economic data on retail sales, consumer sentiment and business inventories. The dollar may continue to remain weaker if the data comes out to be favorable which may support the prices of dollar-denominated commodities.
Copper prices could trade with an upside bias today as the dollar weakens but sharp gains in the commodity could be capped on the back of concerns over China’s monetary policy tightening. Crude oil prices today will take cues from the movement in the dollar but may be capped on the upside on concerns of China increasing interest rates. Gold prices may gain if the dollar continues to weaken.
