Bullion, base metals, crude may trade negative

LONDON (Sept 30)  * MCX Crude fell by 2 percent today despite Rupee depreciation.


* UK’s Mortgage Approvals rose marginally by 1K to 62000 in August.


* German Retail Sales gained 0.5 percent in the last month.


European markets are trading on a negative note today on the back of rising concerns regarding US debt ceiling coupled with Italian Prime Minister Enrico Letta fighting to save his administration. Asian markets ended lower and US Futures are trading in the red.


German Retail Sales gained 0.5 percent in August as compared to a decline of 0.2 percent in July. Consumer Price Index (CPI) Flash Estimate gained 1.1 percent in September as against a gain of 1.3 percent in July. Italian Prelim CPI declined by 0.3 percent in September as compared to a gain of 0.4percent in August. UK’s Mortgage Approvals increased marginally by 1000 to 62000 in August from 61000 in July.


Indian Rupee depreciated by around 0.14 percent today on month end dollar demand from importers coupled with weak global market sentiments. The Rupee touched an intra-day low of 62.45 till 4:30 pm IST.


Spot Gold prices gained around 0.1 percent today on the back of weakness in the DX. However, sharp upside was prevented due to weak global market sentiments coupled with declining trend in SPDR holdings. In the Indian markets, gold prices declined by 0.5 percent today.


Spot silver declined around 0.4 percent taking cues from weak global market sentiments. Weakness in the DX cushioned sharp fall. MCX Silver fell by 1 percent touching a low of Rs.48955/kg till 4:30 pm IST.


Base metals pack on the LME traded on a positive note today due to weakness in the DX. Decline in inventories of base metals also supported upside in prices. However, weak global market sentiments capped sharp upside in prices. In the Indian markets, base metals traded lower today despite Rupee depreciation.


LME Copper prices traded on a flat note today on the back of weakness in the DX. Decline in LME copper inventories by 0.6 percent to 538025 tonnes supported gains. However, weak global market sentiments coupled with rising concerns over the US debt ceiling capped sharp gains in prices of base metals. On the MCX, the near month Copper contract declined by 0.8 percent touching an intra-day low of Rs.465/kg till 4:30 pm IST.


Nymex crude oil prices slumped 1.4 percent today on concerns regarding the US debt ceiling debate that could lead to government shutdown, thereby affecting demand in the world’s largest oil consumption. Weakness in the DX cushioned sharp fall. On the MCX Crude declined by 2 percent today touching a low of Rs.6392/bbl till 4:30 pm IST.


Outlook: In the evening session, we expect precious metals, base metals and crude oil prices to trade on a negative note on the back of rising concerns regarding the US debt ceiling. Further, strength in the DX will exert downside pressure on dollar denominated commodities. However, sharp downside in base metals prices will be restricted as a result of favorable economic data from US in evening session.