Commodities may trade higher on upbeat global markets

MUMBAI-INDIA (Aug 8)  In the evening session, we expect precious metals, base metals and crude oil prices to trade higher on the back of upbeat global market sentiments. Further, forecast for rise in US jobless claims data will lead to expectations that US Federal Reserve will not pull back its stimulus measures. This will lead to weakness in the DX and support upside for dollar denominated commodities.MUMBAI-INDIA (Aug 8)  European equities are trading higher today on the back of favourable economic data from China exports coupled with expectations of more stimulus measures from Bank of Japan. Asian markets ended on a mixed note and US stock futures are trading in the green.

German Trade Balance was at a surplus of 15.7 billion Euros in June as against a previous surplus of 14.6 billion Euros a month ago.

Spot gold prices increased around 0.2 percent today on the back of upbeat global market sentiments. Further, weakness in the US Dollar Index (DX) also supported an upside in prices.    However, sharp upside in prices was capped as a result of declining trend in SPDR gold holdings which is at lowest level since February 2009. In the Indian markets, appreciation in the Rupee added downside pressure in prices on the MCX.

Taking cues from rise in gold prices along with upside in base metals group, Spot silver prices rose by around 0.9 percent today. Further, weakness in the DX acted as a positive factor for prices. Appreciation in the Indian Rupee restricted sharp positive movement in prices on the MCX.  The base metals complex traded on a higher note today on the back of upbeat global markets as a result of rise in Chinese exports beating the estimates. Additionally, weakness in the DX supported an upside in prices.

However, sharp upside in prices was capped on account of mixed LME inventories in today’s trade. In the Indian markets, appreciation in the Rupee prevented sharp upside in prices.   Copper the leader of the base metals pack gained around 2.2 percent today on account of upbeat global markets. Further, favourable Chinese exports data coupled with decline in LME copper inventories by 0.7 percent which stood at 597,575tonnes supported an upside in prices. Additionally, weakness in the DX acted as a positive factor. Appreciation in the Rupee restricted sharp positive movement in prices on the MCX.

Nymex crude oil prices gained marginally around 0.1 percent today ahead of the US jobless claims data. However, weakness in the DX along with optimistic market sentiments prevented sharp fall in prices. Appreciation in the Rupee exerted downside pressure on prices on the MCX.