Base metals and Precius Metals News Update

Precious Metals


Gold recovered from session low of $1315.60/oz to current levels of $1320/oz as the dollar index left some grounds. Gold is taking a correction after reaching record price levels in the recent past. However, the magnitude of decline in gold prices is not equal to the rise in the dollar but gold is rather finding an excuse to
correct. Silver also follows gold and trades lower at $23/oz. MCX gold and silver futures also stayed volatile and fluctuated between gains and losses, tracking international futures. European equities failed to recover despite IFO economic sentiments data came positive. Gold and silver mainly rose on currency uncertainties. If ongoing G-20 meeting winds up with proper solution for currency wars, it could be negative for bullion prices. Sentiments remain negative for precious metals and thus, investors will continue to sell precious metal as and when prices see a slight pullback upwards.  

Base Metals

Base metal prices are trading with gains of anywhere between one to two percent. Reports of closure of Zinc smelters in China along with supportive equity markets are sending prices higher. Most of the Asian equity markets ended higher. European equity markets though opened on the lower side have pared most of there gains as IFO expectation of survey from Germany came in better than expected. In the evening, there are no major data releases due from US. Dollar index after trading lower for most part of the day is currently trading modestly higher as investors await the outcome of the G-20 meeting, which is underway and is expected to discuss on the currency intervention issues. Overall, the bias continues to remain on the positive side; today being last trading day of the week, a small bout of profit booking cannot be ruled out .

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Commodity Blog Updates- Evening Round Up For Base metals and Bullion Metals

Precious Metals-

Stocks, U.S. index futures and commodity futures are declining ahead of key reports that may show America’s unemployment rate climbed. Gold futures traded lower as a halt in the dollar’s declines and the AngloGold announcement which prompted some investors to sell the metal. AngloGold Ashanti Ltd, the world’s third- largest gold producer, eliminated so-called forward-sales agreements which may result in demand component to be absent in future. Silver followed suit and fell more than gold. MCX gold and silver futures were also thrashed out on negative global cues.Markets are expected to remain highly volatile with some gains expected in bullion futures. Data expectations suggest that U.S. unemployment rate may rise to 9.7% in September, the second straight monthly rise. Non-farm payrolls are expected to have dropped 5,000 in September. Negative economic data may help gold prices recover on demand for safe haven asset. However, actual data will provide further direction.

Base Metals 

Base metals prices are trading modestly lower ahead of the crucial non-farm payroll data due to be released in the evening. Most of the Asian equity markets ended lower with the exception of Shanghai which closed higher with gains of more than 3 percent as the markets opened after a week long holiday. European equities also continue to remain modestly lower. The crucial data to watch will be the non-farm payrolls data from US. The expectation is that there will be job cuts and thereby will push the unemployment rate up by 1 bps to 9.7 percent. Job market in US continues to remain weak despite more than a year into recovery. Overall, we at KCTL expect, base metals to trade lower and the actual data will provide further direction.

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