Spot gold prices slipped by 1.7 percent in yesterday's session to $15.3/ounce pressurized by a stronger DX citing higher US interest rate prospects.
Also, weak Chinese GDP coupled with falling imports from India indicated sluggish demand prospects for the yellow metal. India’s gold imports plunged 25 percent in the first quarter as gold prices increased citing sharp Rupee depreciation.
Last week as well, threat of tariffs by the US on additional $200 billion of Chinese goods, dollar index trading at 11 month highs, falling holdings in the SPDR gold trust, led to the fall in gold prices.
MCX Gold prices rose by 0.4 percent on Wednesday to close at Rs. 29885/10 grams.
Spot silver prices declined by 1.7 percent to close at $15.3 per ounce in line with fall in gold and base metal prices while the trade tensions continue to bother investor’s sentiment.
On the MCX, silver prices traded lower by 0.39 percent to close at Rs.39143 per kg.
We expect gold prices to trade sideways as bargain buying will be supportive after comments from Fed Chairman Jerome Powell about gradual interest rate hikes are push factors in the near term.
On the MCX, gold prices are expected to trade lower today, international markets are trading lower by 0.4 percent at $1219 per ounce.
Crude oil prices plunged on Wednesday as latest Energy Information Administration report showed a surprise major build in crude oil inventories of 5.8 million barrels for the week to July 13, after a huge draw of 12.6 million reported for the previous week.
Also, supply woes eased after Russian Energy Minister Alexander Novak said that Russia and other oil producers could raise output by 1 million barrels per day (bpd) or more if shortages hit the market.
Last week as well, Crude oil prices tanked as worries over rising trade tensions between the United States and China and news that Libya had brought some production back online led to fall in oil prices in the recent weeks.
On the contrary, the IEA cautioned that the world's oil supply cushion "might be stretched to the limit" due to production losses in several different countries.
MCX oil prices gained 2.1 percent yesterday to close at Rs.4799/bbl.
NYMEX oil prices are trading flat today at $68.22/bbl. Oil prices are likely to trade lower as investors will closely watch. Prospects of higher output from OPEC rose after Saudi Arabia was said to offer extra crude supplies to some customers will hurt prices.
Base metals traded lower on Wednesday as unfavourable economic data from China along with stronger DX weighed on the counter.
MCX base metals traded lower in line with international trends.
However, Zinc, which fell the most amongst base metals so far this year, surged by around 5 percent in today's session as falling inventories at both LME and Shanghai warehouses coupled with bargain buying boosted the metal.
Copper prices lingered near one year lows yesterday as concerns regarding easing Chinese economy weighed on the red metal.
Also, Chinese GDP showed signs of cooling as manufacturing activity hit a two year low in June'18 amidst heightened trade tensions between the US and China.
Further, the International Monetary Fund warned on Monday that escalating and sustained trade conflicts are increasingly likely, threatening to derail economic recovery and depress medium-term growth prospects.
Also, U.S. Commodity Futures Trading Commission data showed Hedge funds and money managers switched to net shorts of 12919 contracts in the week to July 10, lowest since October 2016.
LME Copper prices are currently trading marginally higher 0.14 percent at $6065/t. Copper prices will trade sideways in today's session as bargain buying will be supportive but Chinese growth concerns and Federal Reserve Chairman Jerome Powell’s comments in support of higher interest rates will keep investors cautious.
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