Commodities Technical Analysis | Gold gains on dollar weakness, copper, oil also rises | January 18, 2010 18:20:00 | www.commodityonline.com.
Spot Gold prices gained 0.5% till 5.00 pm IST as weakness in the dollar helped support an upside in the yellow metal. Gold prices could trade higher in this week as expectations of further weakness in the dollar could support an upside. Officials of the Federal Reserve Bank said yesterday that lending rates in the US may remain low for as long as two years.
The Federal Reserve has kept its target rate at zero percent to 0.25% since December 2008 to revive the economy. On the back of expectations of a lower interest rate in the US, the dollar is expected to weaken further. Weakness in the dollar will help gold prices as a weaker dollar will make the yellow metal look attractive for holders of other currencies.
Copper prices gained almost 2% till 5.00 pm IST as continued Chinese buying coupled with the first inventory decline in 52 days supported an upside in prices. Copper prices traded above $7500 on the LME today on expectations of higher imports by China in the coming months. Prices could continue to trade higher as upcoming data releases by China on Thursday include – GDP, industrial output and detailed trade data. Chinese economic data is expected to come on the positive side and may boost prices further.
Crude Oil prices gained for the first time in six days today on forecasts that China will boost imports and on news that OPEC is not likely to increase production this year. OPEC may not increase production as the market is sufficiently supplied. Oil prices could trade with a positive bias as China’s crude oil imports may rise 15% this year as the country starts building the second phase of its strategic oil reserves.
Outlook
Copper prices could trade higher on expectations of higher imports in China. A weaker dollar could additionally add to the upside. Crude oil prices are expected to rise as OPEC is not expected to raise production this year and Chinese imports could rise further. Gold prices could rise, taking cues from the weakness in the dollar. The US markets remain closed on account of Martin Luther King Day today.
Courtesy: Angel Commodities
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