Spot gold prices declined by 1.24 percent on Monday to close at $1131.7 per ounce extending Friday’s losses ahead of a key U.S. jobs report later in the week that could boost bets the U.S. Federal Reserve will raise interest rates this year.
Prices extended Friday’s declines made after Fed chair Janet Yellen said she expected to begin raising rates later in 2015. Several Fed officials are scheduled to speak this week, keeping the focus on U.S. monetary policy. Traders will also be closely monitoring economic data, including non-farm payrolls due on Friday, to gauge the strength of the economy.
On the MCX, gold prices declined by 0.83 percent to close at Rs.26741 per 10 gms.
Spot silver prices declined by 3.4 percent on Monday to close at $14.6 per ounce. The fall is in tandem with falling gold prices and weak base metals pack.
On the MCX, silver prices declined by 2.85 percent to close at Rs.35750 per kg.
On an intraday basis, we expect gold prices to trade lower on profit booking while comments from Janet Yellen about the probability of rate hike sometime later in 2015.
On the MCX, gold prices are expected to trade sideways tracking international markets
WTi oil prices declined by around 3 percent on Monday to close at $44.4 per barrel pressured by tumbling equities on Wall Street and weak Chinese economic data, although an estimated drawdown in crude stocks at the key U.S. storage hub appeared to limit losses.
Heavy oil oversupply and eroding demand for energy in No. 2 economy China and other Asian and emerging markets have halved crude prices over the last year.
In China, also the world’s largest commodities consumer, industrial companies’ profits fell at their fastest rate in four years, sparking fresh worries about manufacturing activity reports due later this week.
On the MCX, oil prices declined by 2.1 percent to close at Rs.2968 per barrel.
Bearish fundamentals continue to grip the commodity with slowdown in China and oversupplies from the OEPC as well as Non-OPEC nations. Although, hopes of crude inventory drawdown will act as a positive factor.
On the MCX, oil prices are expected to trade lower today.
Base metals on the LME apart from Zinc traded lower yesterday as rising costs and falling product prices pushed profits earned by Chinese industrial companies lower to decline at the sharpest rate in four years in August. Also, investors were at bay ahead of Chinese national holiday and crucial data from the US and China. On the MCX, all the base metal prices except Zinc traded lower in line with international trends.
LME Copper prices plunged by 1.2 percent and dropped to 6-yaer low on Monday as data showed earnings by industrial companies in China, responsible for 45% of world copper consumption, tumbled by $24.6 billion or nearly 9% from a year earlier, with the largest drops in producers of coal, oil and metals. It was the biggest decline since 2011 when the Chinese National Bureau of Statistics first started to gather the data.
Also, share prices of world’s largest copper mining companies plunged sharply yesterday owing to concerns that slump in the copper price could last years due to the slowdown in China. Further, US pending home sales fell 1.4 percent in August compared to July as rising home prices and a tight supply of homes for sale kept buyers at bay.
MCX copper prices traded lower by 1.1 percent and closed at Rs.334/kg in line with international trends.
We expect Copper prices to trade lower today as sentiments regarding the red metal are very bearish and is likely to keep investors away. Also, investors will remain at bay ahead of Chinese weeklong National holiday starting October 1. Further, estimates of weak CB Consumer Confidence data will act as a negative factor. On the MCX, copper prices are expected to trade lower today in line with international trends.
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