Precious Metals & Base Metals Fighting A Stronger US Dollar

Gold returned to its down trend on Wednesday falling to 1245.00 and recovered just a few dollars in the Asian session as traders took advantage of the low prices. Gold climbed to 1248.80 but is unable to keep its forward momentum and should return to decline when European markets open. The US dollar continued to gain trading at 84.43 holding near its 16 month high. Wall Street rose on Wednesday, rebounding after the S&P 500’s largest decline in a month, with social-media shares helping lift the technology sector and as investors pondered when the Federal Reserve would start hiking interest rates. Asian indices opened mostly higher on Thursday, taking cues from their Wall Street peers which recouped losses overnight. South Korean shares underperformed upon resuming trade after an extended holiday weekend.

Gold was trading near its lowest level in three months as markets opened on Thursday, hit by fears of an early hike in U.S interest rates, a stronger dollar and an apparent easing of tensions over the Ukraine. Gold’s safe-haven demand was also curbed after Ukraine’s president said on Wednesday that Russia had removed the bulk of its forces from his country, raising hopes for a peace drive now underway after five months of conflict. The recent drop in gold prices attracted some bargain hunters with SPDR Gold Trust, seeing an inflow of 3 tonnes to bring total holdings to 788.72 tonnes. India – the second biggest gold consumer after China -is not considering an immediate cut in gold import duties, Trade Minister Nirmala Sitharaman said, a policy that could continue to keep buying interest subdued in the country.

Market participants closely monitored U.S. President Barack Obama’s speech Wednesday night outlining a strategy against Islamic State, a group in Iraq and Syria whose savage methods have included the beheading of two American captives.

Silver prices declined by 0.7 percent on Wednesday in line with fall in gold prices. Ease of geopolitical tensions has led to the declining bids for the precious metal. Fall in nickel prices also dragged prices further. Silver is trading at 18.96 gaining 34 points to trade at 18.96 after taking a major tumble on Wednesday. As prices fell below the 19 level, traders started to buy up the cheap commodity. Platinum continued to fall along with precious metals to trade at 1381.95.

Copper continues to trade in the red down by 4 points this morning as the US dollar gained momentum this morning. Copper is holding at 3.109. Base

metals on the LME traded sideways to lower yesterday following earlier sharp earlier in the week on dollar strength and selling. Also, mixed trend in LME stocks acted as a negative factor. Further, worsening of market sentiments after global shares tumbled on Wednesday as markets strengthened bets on an early U.S. rate hike. Copper prices gained 0.2 percent yesterday as Premier Li Keqiang said the country would press ahead with efforts to liberalize its currency and interest rate markets even though previous reforms have presented challenges for companies. However, it remained near a one-month low due to concerns about growth in top consumer China.