Commodities may gain on positive German business index , weak Dollar

Mumbai-India (Feb 24)   European equities are trading on a mixed note today on the back of mixed economic data from the region. Asian markets ended on a mixed note and the US stock futures are trading lower.

German Ifo Business Climate jumped to 111.3-mark in February from 110.6 levels in January. Euro Zone’s Consumer Price Index (CPI) rose to 0.8 percent in January from 0.7 percent in December. Euro Zone’s Core Consumer Price Index (CPI) rose to 0.8 percent in January from 0.7 percent in December.

Spot gold prices are trading higher by 0.8 percent today on the back of rise in haven demand after weak housing data from the US on Friday along with weakness in the DX. Further, mixed global market sentiments could not prevent sharp upside in prices. In the Indian markets, gold prices gained around 0.6 percent today but Rupee appreciation capped sharp gains.

Taking cues from rise in gold prices, Spot silver prices rose by around 0.1 percent today. Also, weakness in the DX acted as a positive factor for prices of the white metal. However, sharp positive movement was restricted on the back of decline in base metal prices. MCX Silver prices gained around 0.5 percent today despite Rupee appreciation.

Base metals pack on the LME traded on a negative note on the back of negative housing data from the US that came on Friday. Also, rise in risk aversion in the markets acted as a negative factor. However, sharp losses were cushioned on the back of weakness in the DX along with decline in inventories. In the Indian markets, base metals traded lower owing to Rupee appreciation.

LME Copper prices fell by around 1 percent today taking cues from weak existing home sales data from the US that fell to the lowest level in more than a year. Also, mixed global market sentiments acted as a negative factor. However, positive economic data from the Euro Zone, weakness in the DX coupled with decline in LME inventories by 1 percent to 282,475 tonnes restricted sharp fall in prices. MCX Copper prices declined by more than 1 percent today taking cues from Rupee appreciation and touched a low of Rs.445.10/kg till 4:00pm IST.

Nymex crude oil prices traded on a flat note today as speculation of cold weather conditions in the US boosted demand for the heating oil. Also, weakness in the DX supported an upside in prices. MCX crude oil prices fell by around 0.1 percent owing to Rupee appreciation.

In the evening session, we expect precious metals, base metals and crude oil prices to trade on a mixed note taking cues from favourable business climate data from Germany. Further, weakness in the DX will support an upside in prices.

However, sharp gains will be capped or reversal can be seen on the back of mixed global market sentiments.


Source:  Commodity Online