European markets traded higher today after Alcoa (AA), the country’s largest aluminium Producer, posted an unexpected first quarter profit after orders increased. Alcoa climbed 6.2 percent in pre-market New York trading as aluminium climbed 1 percent from a three-month low.
Italy and Germany are among six countries in Europe selling debt today, while in the US the Federal Reserve released its Beige Book business survey. The U.S. budget deficit shrank in the first half of fiscal 2012, the Treasury Department reported Wednesday, reflecting both higher revenues and modestly lower government spending compared to a year ago.
The yields on Spanish bonds fell today but markets were cautious as the cost of the country’s borrowings hit four-month highs earlier this week. The interest rate a country pays to borrow on international debt markets, which is also an indicator of risk, for the country’s 10-year-bonds dropped to 5.87pc in the secondary market from 5.93pc on Tuesday.
There is growing concern about Spain’s ability to cut its national debt and pull itself out of recession at a time when unemployment is at over 20pc. These concerns prompted Prime Minister Rajoy to address the issue but he also said that Spain will not need a bailout.
He said the country’s problems are:
[quote]difficult and complicated[/quote]
Spot Gold prices came under pressure till 4.30 pm IST today on the back of rising uncertainty with respect to global economic growth outlook which led to mixed sentiments in the global markets. But, weakness in the US dollar index cushioned further decline in the yellow metal prices. Gold touched an intra-day low of $ 1652.94/oz and was trading at $ 1659.40/oz
Demand for gold jewellery in China continued to grow in 2011, expanding almost 15% to a new record high, a trend that looks likely to be repeated this year, metals consultancy GFMS Ltd. said Wednesday
Taking cues from the fall in gold prices and mixed market sentiments, spot silver prices declined around 0.4 percent. However, a weaker dollar index resisted further fall in prices. The white metal hit an intra-day low of $ 31.45/oz and was hovering around $ 31.67/oz.
Upbeat sentiments in the European markets coupled with weakness in the US dollar index helped base metals pack to trade higher on the LME today, with copper being an exception. Copper prices are trading lower on the back of demand concerns from China, but consumer buying cushioned further losses.
Nymex crude oil increased by 0.5 percent today taking cues from a weaker dollar and rise in China’s passenger car sales by 4.5 percent in March which may increase fuel demand. Additionally, Iran has stopped exports of Iranian crude oil to Spain and Greece created supply concerns for the commodity and this also acted as a positive factor for oil prices. Crude oil touched an intraday high of $ 103.20/bbl and hovered around $ 102.20/bbl .
The Energy Information Administration said crude supplies rose 2.8 million barrels on the week ended April 6. That compares to expectations of a rise of 1.8 million barrels in the week, and comes after two weeks of huge increases. The EIA also reported gasoline supplies declined 4.3 million barrels, and inventories of distillates were down 4 million barrels. The analysts surveyed by Platts had expected gasoline supplies to drop 1.25 million barrels, and distillates supplies to increase 200,000 barrels.
