Commodities may trade mixed, awaits FOMC minutes

February 19, 2014 16:45

MUMBAI: European equities are trading lower today ahead of the housing starts data from the US in the evening session. Asian markets ended on a positive note and the US stock futures are trading in the red.

UK’s Claimant Count Change fell by 27,600 in January as against a decline of 27,700 in December. Unemployment Rate rose to 7.2 percent in December from 7.1 percent in November. Average Earnings Index gained 1.1 percent in December as compared to a rise of 0.9 percent in November.

Spot gold prices are trading lower by 0.2 percent today taking cues from rise in risk aversion in the markets coupled with strength in the DX. Also, correction seen in SPDR holdings exerted downside pressure on prices. The prices touched an intra-day low of $1313.94/oz till 4:00pm IST.

Taking cues from decline in gold prices, Spot silver prices plunged around 0.5 percent today. Also, mixed global market sentiments along with strength in the DX acted as a negative factor for prices of the white metal. However, sharp downside was cushioned on the back of again in base metal prices.

Base metals pack on the LME traded on a positive note on the back of decline in inventories. However, mixed global market sentiments along with strength in the DX capped sharp gains in prices.

LME Copper prices traded higher by around 0.1 percent today taking cues from decline in inventories by 0.9 percent to 290,625 tonnes. However, rise in risk aversion in the markets along with strength in the DX acted as prevented sharp gains. The red metal prices touched an intra-day high of $7220/tonne till 4:00pm IST.

Nymex crude oil prices declined by around 0.2 percent on the back of expectations of gain in API crude oil inventories. Also, strength in the DX acted as a negative factor. The crude prices touched an intra-day low of $102.49/bbl till 4:00pm IST.

The American Petroleum Institute (API) is scheduled to release its weekly inventories today and US crude oil inventories are expected to gain by 1.8 million barrels for the week ending on 14th February 2014.

In the evening session, we expect precious metals, base metals and crude oil prices to trade on a mixed note on the back of mixed market sentiments. Additionally, direction to the prices will be provided if any major announcement happens in the FOMC meeting minutes.

While on the other hand, strength in the DX will act as a negative factor. Further, expectations of weak economic data from the US in the evening session will exert downside pressure on prices.