GOLD – SILVER – CRUDE OIL & NATURAL GAS UPDATE

By FXEmpire.com

Today base metals are trading slightly positive at LME and the Asian equities have also bounced back in green zone after retreating for the first two days of the week. Industrial production has remained weak in Japan while the property prices in China have also failed to appreciate and decreased in 46 cities out of the total 70 cities surveyed. Property sector has been a dragging factor for the economic growth in China and may continue to restrict upside for metals.

From the Euro-zone, the current economic scenario has improved slightly and the Spanish 10 year bond yield has declined by 0.18 percent and is presently at 5.8 percent after yesterday’s bond auction. Respite of Euro might still be under question, as Spain would go for 10 and 12 year’s debt sale tomorrow along with France and the long-term debts might not be on demand compared to the short term. From the economic data front, the Euro-zone current account is expected to remain weak after declining exports and imports. The trade balance has remained weak, with higher austerity and budget cut current account may not appreciate drastically, and may limit the Euro currency from much gains. From the US, the mortgage applications are expected to decline after stricter norms set forth by the top 5 mortgage providers in US.

Therefore, with stricter norms we may see the mortgage applications to decline compared to previous months. In today’s session base metals may post an early gain due to better equities and economic confidence, while the metals pack may continue to retreat as demand may further weaken after weak Chine property sector and negative economic releases from US and Europe.

Spot gold almost paused overnight and is currently hovering near the 1650 level. Spain sold 3.18 billion Euros ($4.2 billion) of debt yesterday, compared with the maximum target of 3 billion Euros. The IMF increased its estimate for global growth in 2012 to 3.5 percent from 3.3 percent and lifted its forecast for the U.S. expansion to 2.1 percent from 1.8 percent, easing concern that Europe’s debt crisis will stifle the recovery.

Silver traded higher by 0.7 percent on the international markets on Tuesday, on the back of weakness in the US dollar index coupled with upbeat sentiments in the markets. The white metal touched an intra-day high of $ 31.88/oz and closed at $31.68/oz yesterday

Currently, crude oil futures prices are trading above $104/bbl, with gain of more than 0.40 percent in Globex electronic platform. Higher draw down in petroleum stocks in addition to bounce back in equity market is supporting oil futures to trade on positive trend. As per American Petroleum Institute, crude oil inventory have increased by 3000K barrels, whereas petroleum stocks have declined by more than 2000K barrels each. Likewise, as per US energy department, crude oil stocks are also expected to climb up, whereas fall in gasoline and istillates stocks are expected to fall but in a slower pace than prior week. Thus, lower draw down of inventory level may create some pressure during US session.

The Euro-zone current account balance for the month of February is expected to come down , which may create pressure on Euro, which ultimately have negative impact on oil prices. On the other side, IMF have revised world economic growth outlook from 3.2 to 3.5 percent. Expectation of easing debt concern in Spain along with statement given by IMF may support Euro to be on higher side. So, overall, we may expect oil futures to trade in a positive direction during Asian and European session however may come under pressure during US session.

Natural gas futures prices fell by more than 3 percent both in NYMEX platform and MCX platform. Concern of lower demand due to mild weather condition, might have pressurized gas futures prices. In addition to it, higher level of production is having a bearish impact on gas prices. Today, we may expect gas prices to continue the bearish trend driven by the unchanged fundamentals of higher production level, ahead of US Energy department inventory tomorrow.

Originally posted here