 "Metals, crude up on weak US jobs data")
Base metals moved up in early Wednesday trade in London on weakness in the dollar, following weak US jobs data, reducing the chance of an interest rate rise by that country's central bank.
Copper rose 0.8 per cent to trade at $4,673 a tonne in opening trad as a regional Federal Reserve head said he saw slower rate hikes now than he did only a year before, although he is in favour of a rise this month, painting a bullish picture of the US economy.
The metal also got support from a strike at Codelco’s small Salvador deposit in Chile. The rise was capped by a persistent gain in the inventory on the London Metal Exchange (LME) at Asian warehouses. Copper's price for near-month delivery also moved up by 0.8 per cent to Rs 313.6 a kg in early trade. Other metals in the group moved up similarly.
“Base metals would continue moving up till the next US non-farm payroll data is out early next month,” said G Thiagarajan, Director, Commtrendz Research. The US economy apparently added 151,000 jobs in August, disappointing expectations for an increase of 180,000. The number of jobs created increased by 275,000 in July, whose figure was revised from a previously estimated 255,000.
The latest data indicates the US economy is yet to show a sustained recovery signal. And, dampened expectations for a near-term rate rise, as Fed officials recently indicated the pace of such an increase would be data-dependent.Copper rose 0.8 per cent to trade at $4,673 a tonne in opening trad as a regional Federal Reserve head said he saw slower rate hikes now than he did only a year before, although he is in favour of a rise this month, painting a bullish picture of the US economy.
The metal also got support from a strike at Codelco’s small Salvador deposit in Chile. The rise was capped by a persistent gain in the inventory on the London Metal Exchange (LME) at Asian warehouses. Copper's price for near-month delivery also moved up by 0.8 per cent to Rs 313.6 a kg in early trade. Other metals in the group moved up similarly.
“Base metals would continue moving up till the next US non-farm payroll data is out early next month,” said G Thiagarajan, Director, Commtrendz Research. The US economy apparently added 151,000 jobs in August, disappointing expectations for an increase of 180,000. The number of jobs created increased by 275,000 in July, whose figure was revised from a previously estimated 255,000.
“Copper prices will trade higher today, as weak US jobs and services data is adding to bets that the rate hike might be pushed back. However, a persistent surge in LME stocks remains a cause of concern,” said Prathamesh Mallya, an analyst at Angel Commodities Broking.
The dollar weakened against most Asian currencies, with the rupee up 0.2 per cent at 66.37, against 66.53 on Tuesday.
The weak US jobs data, however, was negative for precious metals. Spot gold was trading lower by 0.1 per cent at $1,348/oz abroad, translating to 0.1 per cent lower at Rs 31,353 per 10g for near-month delivery on the Multi Commodity Exchange (MCX) here. Standard gold closed with a gain of 0.8 per cent at Rs 31,340 per 10g at Zaveri Bazaar here. Festival demand is likely to keep bullion elevated in near futures. Silver gained Rs 870 to close at Rs 47,505 a kg.
Gold is sensitive to moves in US rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar in which it is priced.
WTI oil was also trading higher, by 0.9 per cent at $45.24 a barrel, while MCX oil prices traded higher by 1.5 per cent at Rs 3,008 a barrel. Limited likelihood of a near-term agreement among the world's biggest exporters to rein in production kept gains in check.