Gold witnessed a mixed movement in yesterday’s trade and eventually closed in the red. Prices on the Comex June contract slipped 0.2 percent to $1588/oz despite dollar weakness and increased risk appetite.
Movement in gold on Monday shows that investors remain cautious over prospects of sharp increase in prices in the near-term. With prices closing below the $1600/oz mark despite sharp decline in the dollar is an indication of a bearish trend in gold.
Holdings in the SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, remain unchanged at 1,282.94 tonnes on 21stMay 2012.
On Monday, silver prices came under pressure and Spot Silver fell around 1 percent. The white metal did not take cues from positive risk sentiments and followed movement in gold. With long-term uncertainty remaining intact, upside in prices was capped.
Spot silver prices declined around 1 percent and closed at $28.40/oz after touching an intra-day low of $28.04/oz in yesterday’s trading session.
With upbeat global market sentiments and dollar weakness, gold is expected to receive support, but we do not expect sharp increase in prices on account of long-term uncertainty associated with the European crisis. Silver too is expected to trade with a positive bias but sharp gains are not seen.
Crude oil prices gained a whopping 1.2 percent on the Nymex yesterday as a weaker dollar coupled with upbeat US equities led to rise in risk appetite. The commodity yesterday rattled between weak inherent fundamentals on one hand and high risk appetite on the other. Crude oil prices touched an intra-day high of $93.06/bbl and closed at $92.60/bbl in yesterday’s trading session.
During the week, crude oil prices could remain susceptible to volatility on the back of discussions that are to be held with respect to sanctions on Iran. At the same time, global leaders at the G8 meet indicated the expectations of increase in oil demand along with the impact disruptions can have on global oil prices.
The American Petroleum Institute (API) is scheduled to release its weekly inventories today and US crude oil inventories are expected to increase by 1.5 million barrels for the week ending on 18th May 2012.
US, UK, France, Germany, China and Russia will hold meeting tomorrow with Iran and its officials over its nuclear program. The sanctions by the above countries are obstructing the Iran’s export for crude oil which is forcing them to negotiate. However, as per the US officials they won’t ease the pressure on Iranian crude oil before the negotiations are successful.
For today’s trade, we expect oil prices to trade higher, taking positive cues from upbeat risk sentiments. But in late trade, the inventory report would have an impact on prices as it is expected to show an increase and sharp gains in the commodity could be capped on account of the same.
