Precious, Base Metals, Crude Oil may trade mixed on rising QE concerns

Mumbai-India (Nov 22)  European equities are trading on a negative note today as Italy and Spain face budget scrutiny in Euro Zone Finance Minister’s meeting. Asian markets ended on a positive note and the US stock futures are trading higher.

CME group has cut the initial margins for crude by 8.1 percent, gold by 9.4 percent and silver by 11.1 percent.

German Ifo Business Climate jumped to 109.3-mark, highest level in last 18 months in November from 107.4 level in October.

Indian Rupee appreciated by around 0.1 percent today on the back of dollar selling by the RBI when the currency breached the 63-mark in the morning. However, dollar demand by oil importers coupled with FII’s selling 59.8 crores thereby snapping 32-day buying streak restricted sharp gains.

Spot gold prices gained around 0.1 percent taking cues from weakness in the DX. However, declining trend in SPDR gold holdings coupled with mixed market sentiments restricted sharp gains. In the Indian markets, gold prices fell around 0.3 percent owing to Rupee appreciation.

Spot silver prices traded lower by 0.2 percent today taking cues from declining trend in silver ETF holdings. However, weakness in the DX coupled with upside in gold prices prevented sharp fall in the prices. MCX Silver prices declined around 0.6 percent due to Rupee appreciation touching an intra-day low of Rs.44764/kg till 4:15 pm IST.

Base metals pack traded on a mixed note today taking cues from mixed global market sentiments along with mixed trend in LME inventories. However, weakness in the DX coupled with favourable economic data from the Euro Zone restricted fall in prices of base metals. In the Indian markets, base metals traded on a negative note.

LME Copper prices rose around 0.5 percent today on the back of favourable business confidence data from Germany, third biggest consumer of the red metal. Also, decline in LME copper inventories by 0.7 percent to 439,100 tonnes coupled with weakness in the DX supported gains. However, mixed global market sentiments capped sharp gains. MCX Copper prices traded on a flat note.

Nymex crude oil prices trading lower by 0.4 percent but further fall was prevented as the US Iran nuclear talks did not draw to any conclusion. Also, weakness in the DX coupled with favourable business confidence data from Germany acted as positive factor. In the Indian markets, crude prices declined by 0.6 percent today on the back of Rupee appreciation touching a low of Rs.6022/bbl till 4:15pm IST.

In the evening session, we expect precious metals, base metals and crude oil prices to trade on a mixed note on the back of expectations of delay in QE tapering by the Federal Reserve after weak economic data in the yesterday’s trade. Additionally, upbeat market sentiments coupled with weakness in the DX will support an upside in prices.

In the Indian markets, Rupee has appreciated which will cap sharp gains in prices on the MCX.