Market and product

European markets are trading higher today owing to favorable German trade balance. Asian markets are trading higher and the US stock futures are trading in the green.

Spot gold prices are trading flat today at $1264/oz while MCX gold prices are trading flat at Rs.29782 per 10 gms. Gold steadied near a 1-1/2-week low on Tuesday, under pressure after suffering its steepest loss since March in the prior session as the dollar remained strong, curbing appetite for the precious metal. Bullion has fallen in five out of the past six sessions, having failed to hold above resistance at $1,300, and not benefitting much from data last week showing that the U.S. economy added the fewest jobs in seven months in April.

LME copper prices are trading higher by 0.3 percent at $4698.50 while MCX copper prices are trading higher by 0.24 percent at Rs.313.90 per kg. London copper traded around four-week lows on Tuesday after a stronger dollar and renewed jitters about Chinese economic growth tarnished demand for commodities. The dollar has held near its highest this month, after Federal Reserve officials expressed support for two rate hikes this year, despite a run of softer data.

WTI oil prices are trading higher by 0.92 percent at $44.31 per barrel, while MCX oil prices are trading higher by 0.65 percent at Rs.2930 per barrel. Oil rose on Tuesday, driven by supply disruptions in Canada and elsewhere that have knocked out 2.5 million barrels of daily production and temporarily eclipsed concern over high global inventories and a looming surplus of refined products. In spite of outages from Canada to Nigeria, oil prices are down by more than 2 percent so far this week, hampered by worries that even hefty dents to production will have little effect on the growth of stocks of unwanted crude.

Outlook

We expect gold prices to trade lower on account of strength in the DX while rising investment demand as seen in the inflows in the SPDR gold trust will act as a positive factor.

We expect oil prices to trade higher as supply disruption concerns owing to situations in Canada and Libya will boost gains. However, global oversupply and rising US stocks will exert downside pressure on oil prices.

We expect LME Copper prices to trade lower as weak imports from China in response to surging stockpiles has raised demand concerns. Also, strength in the DX will exert pressure.