Gold Steady Near Recent High While Copper Steady Near Recent Low

Gold eased $1.40 as traders sold off to book profits after gold touched 1370 on Wednesday. Gold prices gained around 1.3 percent yesterday taking cues from escalating tensions in Ukraine wherein the EU agreed on a framework on Wednesday for its first sanctions on Russia since the Cold War, a stronger response to the Ukraine crisis.  

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 1.50 tons to 811.20 tons on Wednesday. Although there is fall in the gold holdings in SPDR, rise in safe haven demand due to geopolitical tensions between Ukraine and Russia continued to support upside in gold prices.

Gold prices moved higher to the most in six months as worries over Ukraine issue and tensions related to China escalated gold prices. The EU agreed on a

framework on Wednesday for its first sanctions on Russia, a stronger response to the Ukraine crisis than many expected Chinese worries escalated further as investors got spooked by default in bond payment, majority investors awaits Chinese data today on its Industrial output. Taking cues from rise in gold prices along with weakness in the DX, silver prices increased around 2.0 percent in yesterday’s trade. However, sharp upside in the prices was capped due to mixed performance in base metals complex coupled with mixed market sentiments. The white metal touched an intra-day high of $21.39. Silver eased by 68 points to this morning to trade at 21.29. Gold and silver prices are expected to trade on a positive note today on the back of rise in safe haven demand due to geopolitical tensions between Ukraine and Russia. Further, upbeat market sentiments coupled with weakness in the DX will act as a positive factor.

Copper continued to ease trading at 2.949 this morning. Copper prices gained 0.2 percent yesterday as a part of correction seen in prices after consistent plunge in the last few days on the back of weak economic data from the biggest consumer, China. Also, weakness in the DX along with decline in LME inventories by 0.8 percent to 255,500 tonnes acted as positive factors. However, unfavorable industrial production data from eurozone coupled with rise in risk aversion in the markets restricted sharp upside movement. Copper prices in Shanghai and London showed some correction after a free-fall in copper since three days. Data showing a surprisingly big tumble in China’s exports last month has spooked investors, who are now waiting for industrial production and retail sales figures for January and February. At least one U.S. scrap copper trader has suffered large losses after a buyer in China defaulted on a deal in the past week, one of the first signs that sinking prices and tightening credit are impacting the physical market.