Precious base metals Crude Oil may trade negative

European markets are trading on a bearish note taking cues from unfavorable data from the Euro zone region which diminished hopes of early recovery in the region. US Index Futures and Asian shares declined. There were also risk aversion witnessed on the back of concerns that US Federal Reserve might discontinue its bond buying program or reduce it.

Spot gold prices are trading 0.3 percent higher due to short coverings by the market participants after a sharp fall. Prices traded in the negative territory in early part of the day due to worries that the US Federal Reserve might discontinue monthly bond buying program of the nation. This created risk aversion and exerted downside pressure on the gold prices. Strength in the DX also acted as bearish factor for the gold prices.

In the domestic market, prices of gold on MCX are trading lower 0.3 percent taking cues from fall in the spot gold prices. However, depreciation in the rupee cushioned fall in the MCX gold prices.

Spot silver prices are also trading in the negative terrain down 0.2 percent. Weakness in the base metal pack along with strength in the DX is also acting a bearish factor for the spot silver prices. In the domestic market, silver prices on MCX are trading lower tracking fall in the spot silver prices. Depreciation in the rupee cushioned fall in the prices.

The base metals complex are trading lower due to worries that Chinese government might announce measures to curb rise in the property prices. Strength in the DX along with worries that the US Federal Reserve might discontinue its bond buying program also added to the losses in the base metals prices.

Copper prices are trading 1.43 percent lower due to risk aversion resulting from worries that US Federal Reserve is likely to stop or reduce the stimulus measures. Strength in the DX also weighed on the prices. Rise in the LME Copper inventories also acted a bearish factor for the red metal prices. Copper prices on MCX traced weakness in the international prices.

Nymex crude oil prices are trading 0.7 percent lower due to risk aversion amongst the market participants caused by concerns that US Federal Reserve might curb stimulus measures announced sooner than expected. Strength in the DX also weighed on oil prices. Depreciation in the Indian rupee however, restricted fall in the crude oil prices on MCX.

In the evening session, we expect precious, base metals and crude oil prices to trade with negative bias owing to risk aversion amongst the market participants resulting from the concerns that US Federal Reserve might discontinue or slow the bond buying program. Strength in the DX is likely to add to the losses in the commodities. Expectation of rise in the US crude oil inventories would also act as a bearish factor for the crude oil prices.

Courtesy: Angel Commodities

Source: http://www.commodityonline.com/futures-trading/market-report/Precious-base-metals-Crude-Oil-may-trade-negative-29475.html

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