The metals market has been trading in the red even as global economic data shows a stronger recovery than previously expected. Gold traders remain focused
Silver has fallen close to recent lows trading at 20.697 as both precious metal and industrial metal demand tumbles. Silver is down 81 points this morning following yesterday’s steep decline. Silver prices traded lower by 3 percent yesterday taking cues from fall in gold prices coupled with downside in base metals group. The base metals pack traded on a negative note on speculation that the Federal Reserve may start QE taper earlier than expected. Also, strength in the DX coupled with weak global market sentiments exerted downside pressure. Further, mixed LME inventories scenario acted as negative factor for prices of base metals. The US Dollar Index (DX) gained around 0.1 percent yesterday on the back of rise in risk aversion in market sentiments which led to rise in demand for low yielding currency.
Further, expectations that Federal Reserve may start its QE tapering program sooner than estimated exerted downside pressure on the currency. The DX touched an intra-day high of 81.55 and closed at 81.25 on Tuesday.
Copper is trading at 3.207 declining by 15 points after falling yesterday. Copper declined by 0.9 percent taking cues from record monthly output in China coupled with QE taper concerns from the US. Also, strength in the DX acted as a negative factor. The communist party meeting ended yesterday in China saying in a statement that the states will remain dominant in the economy even as market play a decisive role. China’s refined copper output rose to 637,958 tons in October, up from the previous record of 620,086 seen in September, according to data from the National Bureau of Statistics. The number was also 22.9% higher compared to last year. Record output in the world’s largest consumer of refined copper may put some pressure on the prices during the day. The base metal complex traded down yesterday and should remain weak today.