In a cautious trade, commodities were seen rebounding from its initial losses. Euro Zone struggling to tackle its debt crisis and weak economic indicators from the US and China made investors risk averse. Spot gold was off its one-and-a half week low, rising nearly one percent. However, firm US dollar kept a lid over the gains. In the previous session, the yellow metal posted its biggest daily fall since late June. The Indian rupee resuming its strengthening act following an initial fall pushed the precious metals in MCX into a negative territory. Gold extended the previous session losses, falling to its lowest in more than four week. Base metal complex in LME were mixed. LME copper was seen paring its earlier losses and ticked higher. However, prices were caught in a tight range as investors remained cautious ahead of slew of economic releases from China including GDP later this week. Nickel gained the most with prices rising more than 0.5 per cent. In MCX, except for nickel, other base metals were on a negative turf, weighed down by movements in rupee. Ahead of weekly EIA crude oil inventory report, crude oil rose from its one week low levels in the international market gaining nearly one per cent. EIA is anticipated to show a draw in crude oil stocks in its weekly inventory report. API data released earlier today showed that inventories shrunk 695000 barrels last week. Earlier, Germany sold EU4.15 billion of 10year bonds at a record low yield of 1.31 percent, pushing the Euro currency up.


Events in Focus

Market sentiments were seen imprecise ahead of the U.S FOMC minutes, scheduled later in the day. However, encouragement over Europe’s fresh lifeline to Spain limited distress for investors. Looking into the evening session, the U.S trade balance numbers would be another key event to watch out for. After the rate cut action by key central banks across the globe last week, financial markets would be anticipating fruitful comments out of the FOMC minutes, indicating at a possible quantitative easing. The week could pack a punch with key economic data from the major commodity consumer- China in terms of Industrial production, GDP and retail sales. Any uncanny outcome of these data could call for a ground reality check that a hard landing could become inevitable for the Chinese economy. With crude oil prices feeling the heat following an end to the strike in Norway, crude investor would be fervently looking forward to the Department of Energy inventory data listed for release in the evening, which could show a drop in stock levels. The week in particular is light on economic data from the U.S and markets could be driven by events evolving in Europe and China.

Technical Commentary

GOLD Mini
MCX June
 
Witnessing selling sentiments less likely to persist until it breaks below 29220 region credibly and such botched moves could be an early indication of short covering rally towards 29430/480 and even more towards 29560. But break below 29220 region could renew our bearish sentiments, which could initially test the 29110/29030 or even lower.

SILVER Mini
MCX June

An initial pullback is favored towards 53000-53350 levels followed by a consolidation and drift lower. However, breaking of the broad trend line support of 52000 is required to set off long liquidation pressure possibly till 48600 later. Conversely a turn higher above 54000 could dent our broad bearish expectations.

COPPER
NCDEX/MCX June

Sell off triggered in the previous session was halted near 417. For the day, prices have to consistently trade below the same to continue the selling pressure towards 414/412 or even more. Else would call for a choppy with mild positive bias session.

NICKEL
MCX June

After taking support at 895 prices witnessing signals of a corrective pullback. For Intraday as long as 895 is undisturbed, prices likely to continue the positive momentum towards 912 but further moves are less anticipated.

CRUDE OIL
NCDEX/MCX June
 
Prices have held the support level around 4685-90 region and are witnessing a pullback, which is likely to face resistance around 4715-30 levels. A break above 4730, could call for an upside rally towards 4775/4810 region. On the contrary, break below 4685 territory could target levels of 4650/4625 levels.

Source: Geojit Comtrade