Gold trades flat, crude oil under pressure

India’s industrial output rose less than expected by 3.6 percent (y-o-y) in February 2011 as against 3.7 percent in January. This slowdown was witnessed due to sluggish production in the manufacturing sector and the capital goods sector in particular. Industrial output grew by 15.6 percent in February 2010. Markets had anticipated the country’s industrial output to grow by 5.2 percent in February.
French industrial production rose less-than-expected by 0.4 percent in February as compared to 0.7 percent in the month of January. Markets had predicted production to increase by 0.5 percent in February. Italian industrial production rose as expected by 1.4 percent in February as against the decline of 1.5 percent in the prior month.
Spot Gold prices traded on a flat note today, as the metal experienced selling pressure at the higher levels. But sharp fall was cushioned due to weakness in the US dollar. Spot Gold touched an intra-day low of $1471.016/oz and are hovering around $1472.79/oz till 4.00 pm IST. On the MCX, gold prices touched an intra-day high of `21,429/10 gms and were trading at `21346/10 gms.
Weakness in the US dollar helped base metal prices to trade higher today. But sharp gains were capped mainly on account of choppy sentiments in the global equity markets. Nickel prices gained almost 1 percent on the LME to became the top performer of the day. Prices touched an intra-day high of $27,920/tonne and were hovering at $27,760/tonne. On the MCX, the metal gained around 0.2 percent and were trading at `1220.20/kg till 4.00 pm IST.
Nymex crude oil prices came under pressure today after Gaddafi accepts peace plan including an immediate ceasefire which eased the supply worries in Libya. In addition to this, weak sentiments in the global financial markets also exerted pressure on oil prices. But sharp declines were not witnessed due to weakness in the dollar today. Prices touched an intra-day low of $112.30/bbl and were trading at $112.69/bbl.
Outlook
We expect base metals to witness upside today, mainly on the back of a weaker dollar. But sharp gains will be capped due to mixed sentiments in the global financial markets.
Crude oil prices are expected to trade higher today on account of weakness in the US dollar. But sharp gains will be capped as Gaddafi accepted the peace plan including an immediate ceasefire.
Gold prices are expected to witness upside today on the back of poor sentiments in the global financial markets which would make investors to flock away from riskier assets.
Courtesy: Angel Commodities