Commodity market Updates

Precious Metals

Gold prices are currently trading at $1397.5, down by $12.7 on COMEX and at Rs.20,227 down by Rs.300 in the Indian markets. Rebound in dollar index along with profit booking sent gold prices lower. Dollar index continues to move higher on the back of expectation of positive economic data and thereby is pressuring gold prices. Most of the Asian equity markets closed lower and European equities also continue to trend lower. China’s trade surplus in the month of October came in higher than expected as imports grew at a slower pace.

In the evening, data is expected to indicate declining trade deficit along with declining jobless claims. So the dollar index might remain higher and thereby gold prices might face continued pressure. Silver is currently trading at $24.45, down by $1.40 on COMEX and at Rs.40,686 down by Rs.2,000. Silver prices fell drastically on reports of COMEX raising margin requirements to $6,500 as against $5,000 previously. The gold-silver ratio fell to as low as 48 but given the underperformance of silver on the downside, the ratio has moved back higher to 51 levels. Overall, we expect silver prices also to continue to remain on the lower side.

Base Metals

Base metal prices are trading lower with losses of anywhere between one to two percent on the back of higher dollar index and weak equity markets. Most of the Asian equity markets closed lower and European equities

also continue to trend lower. China’s trade surplus in the month of October came in higher than expected as imports grew at a slower pace. Dollar index continues to move higher and is currently trading higher by half a percent thereby adding to the pressure. In the evening, data from US is expected to indicate declining trade deficit. Also the initial jobless claims may come in lower and import index may come in higher thereby giving positive indication for base metal prices.

Overall, positive economic data from US might prompt slight pull back on the higher side for base metal prices.

Posted in: Base metals,Precious metals