Gold, Silver to trade lower as market awaits US Fed minutes

Mumbai-India (Apr 8)  European markets are trading lower today as investors are also seeking clues on the timing of the Federal Reserve’s first interest-rate increase since 2006. Asian markets ended higher and the US stock futures are trading in the green.

German Factory Orders for the month of March decreased to 0.9 percent as against a decline of 2.6 percent in February. Euro zone’s Retail Sales for the month of March declined to 0.2 percent as against 0.9 percent in February.

Gold prices rose by 0.2 percent as markets remain cautious ahead of FOMC policy meeting minutes due to be released tonight. Also, money managers are pessimistic regarding the yellow metal. Spot gold was up 0.2 percent at $1211 an ounce by 4PM IST. On the MCX, gold prices are trading lower by 0.1 percent at Rs.27007/10 gms.

Spot silver prices are trading higher by 0.2 percent today while MCX silver prices are trading higher by 0.4 percent trading at Rs.37739/kg. strength in gold prices in the international market is acting as a positive factor.

LME Copper prices rose by 0.1 percent as mining disruptions in Chile, Indonesia and Australia raised concerns on global supply. Also, unfavourable economic data from Euro Zone and UK coupled with decline of 0.7 percent in LME stocks supported gains. MCX copper prices gained by 0.1 percent at Rs.380.95/kg in line with international trends.

Brent crude oil declined by 1.3 percent and Nymex plunged by 2.1 percent on Wednesday on concerns of rising supply as Saudi Arabia’s oil minister Ali al-Naimi said that the kingdom’s crude production will continue around 10 million barrels per day, close to a record high. He also added that he expects crude prices to rise in the “near future. On the MCX, oil prices are trading lower by 0.7 percent at Rs.3302/bbl.

We expect gold and silver prices to trade lower today owing to strength in the dollar before the Federal Reserve publishes minutes of its March meeting. Also money managers cut their net-long positions in U.S. gold futures and options by 73 percent since the end of January.

Crude oil prices are expected to trade lower as Saudi Arabia boosted crude production to its highest level on record in March. Also, cautious stance ahead of FOMC meting minutes will exert pressure.

We expect LME Copper prices to trade lower today as strength in the DX ahead of FOMC Meeting minutes will exert pressure on the metal. However, supply disruptions from major producers along with cut in Chile’s copper production for 2015 will restrict sharp fall.

Source: Angel Commodities