 "Gold, copper rebound on dollar weakness")
Major commodities on Wednesday went up in early trade on the London Metal Exchange (LME) due to short covering and weakening of the dollar.
Copper rose to its highest in two weeks on Wednesday, as the dollar weakened and a production outage at the world's second-largest copper mine in Indonesia after a tunnel collapse looked set to continue indefinitely.
Three-month copper on the LME rose one per cent to $7,447 a tonne, ahead of Bernanke's speech. US Federal Reserve Chairman Ben Bernanke will testify on Wednesday before Congress.
A weaker dollar typically lifts assets priced in the unit because it makes those cheaper for holders of other currencies.
Freeport McMoRan Copper and Gold Inc on Wednesday it would not restart production at its Grasberg copper mine in Indonesia after the tunnel collapse that killed 28 workers till it is convinced of the mine's safety.
Even on MCX, copper was up 2.36 per cent to trade at 419.35 per kg. aluminium, lead and zinc were also up 1.6-1.8 per cent, while gold was trading 1 per cent higher at Rs.26, 389 per 10 gram. However, interestingly spread between June and August MCX gold contracts have risen from around Rs.100 to Rs.200 indicating that there was some short covering.
Credit Suisse on Wednesday said in the report that, "while the currency of choice does impact commodity valuation, it is notable that the broad US dollar trade-weighted index has not moved above its recent range, and we believe that talk of a US dollar bull market is premature"
The research house has said for gold support is $1310 but its ultimate target is $1085 per ounce.
For copper, Arizona-based Freeport's decision to suspend operations at the remote Papua mine is crucial. However analysts are not bullish technically.
Barclays Commodities Siki Cooper said that, "We view prices above $7,500/t as an opportunity to short copper. However, sentiment across the base metals is weak and without another small bounce in prices there would be downside risk to our Q2 price forecasts for all the base metals. "
Credit Suisse also agrees that industrial raw material has bearish outlook. It said, "With global growth remaining below average in Q1, and the recent data suggesting continued weakness this quarter, we expect most industrial commodities to remain under pressure over coming months, with markets where supply is improving facing the most pressure."
Copper rose to its highest in two weeks on Wednesday, as the dollar weakened and a production outage at the world's second-largest copper mine in Indonesia after a tunnel collapse looked set to continue indefinitely.
Three-month copper on the LME rose one per cent to $7,447 a tonne, ahead of Bernanke's speech. US Federal Reserve Chairman Ben Bernanke will testify on Wednesday before Congress.
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Even gold was near $1,400 an ounce, recovering from a level below $1,340 early this week. Gold was trading around $1,395 while silver was at $22.85. The rise in commodities has been attributed to the correction in the dollar. The dollar shed some gains against a basket of currencies ahead of the Bernanke testimony.
A weaker dollar typically lifts assets priced in the unit because it makes those cheaper for holders of other currencies.
Freeport McMoRan Copper and Gold Inc on Wednesday it would not restart production at its Grasberg copper mine in Indonesia after the tunnel collapse that killed 28 workers till it is convinced of the mine's safety.
Even on MCX, copper was up 2.36 per cent to trade at 419.35 per kg. aluminium, lead and zinc were also up 1.6-1.8 per cent, while gold was trading 1 per cent higher at Rs.26, 389 per 10 gram. However, interestingly spread between June and August MCX gold contracts have risen from around Rs.100 to Rs.200 indicating that there was some short covering.
Credit Suisse on Wednesday said in the report that, "while the currency of choice does impact commodity valuation, it is notable that the broad US dollar trade-weighted index has not moved above its recent range, and we believe that talk of a US dollar bull market is premature"
The research house has said for gold support is $1310 but its ultimate target is $1085 per ounce.
For copper, Arizona-based Freeport's decision to suspend operations at the remote Papua mine is crucial. However analysts are not bullish technically.
Barclays Commodities Siki Cooper said that, "We view prices above $7,500/t as an opportunity to short copper. However, sentiment across the base metals is weak and without another small bounce in prices there would be downside risk to our Q2 price forecasts for all the base metals. "
Credit Suisse also agrees that industrial raw material has bearish outlook. It said, "With global growth remaining below average in Q1, and the recent data suggesting continued weakness this quarter, we expect most industrial commodities to remain under pressure over coming months, with markets where supply is improving facing the most pressure."