LME Metals Gain on Weak Dollar, Crude Gains on Iran Supply Concern
CommodityOnline | Feb 26, 2012 01:57AM ET
European markets recovered from earlier losses and traded higher on rising expectation that the European Central Bank (ECB) will inject nearly half a trillion Euros into banks at next week's threeyear refinancing operation on 29th February 2012.
Additionally, good earnings reported from the Telecom Italia, the country’s biggest phone company and BASF, the world’s largest chemicals maker also led to rise in risk appetite in the global markets today.
Spot gold prices traded on a flat note today and was hovering around $1779/oz till 5.00 pm IST. However, weakness in the US dollar resisted decline in the yellow metal prices today. On the MCX, Gold April contract declined around 0.6 percent and was trading at Rs28,742/10 gms till 5.00 pm IST.
Spot silver prices traded higher by 0.7 percent today on the back of a weaker dollar. The white metal touched an intra-day high of $35.70/oz and was trading at the level of $35.60/oz till 5.00 pm IST. MCX Silver March contract traded on a flat note today as gains were resisted on account of appreciation in the Indian Rupee (INR).
The INR appreciated around 0.2 percent and was trading at the level of 48.98 till 5.00 pm IST.
Rise in risk appetite in the global markets coupled with weakness in the US dollar helped base metals complex to trade higher on the LME in today’s trading session. However, appreciation in the Indian Rupee capped sharp gains on the domestic bourses.
Nymex crude oil prices increased around 0.6 percent today on the back of supply concerns from Iran. Additionally, a weaker dollar and upbeat sentiment in the global markets also acted as a positive factor for the commodity.
Prices touched an intra-day high of $108.70/bbl and was hovering around $108.27/bbl till 5.00pm IST today. On the MCX, crude oil March contract increased almost 1 percent and was trading at Rs5332/bbl after touching an intra-day high of Rs5363/bbl till 5.00pm IST.
Outlook
Gold and silver prices are expected to trade higher, taking cues from dollar weakness and upbeat market sentiments today.
We expect base metals to trade with a positive bias today on account of rise in risk appetite in the global markets coupled with a weaker dollar.
In case of crude oil, we expected crude oil prices to trade higher on the back of supply concerns from Iran and dollar weakness.
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