The rollback of excise duty on gold jewellery and deferring of tax avoidance bill by another year could guide the domestic commodity market sentiment today.

The outcome of the French and Greek election results intensified worries over the European debt crisis.

The euro slumped to a three-month low. The election results also raised fears over the fate of austerity measures being adopted to tackle the region’s sovereign debt crisis.

Gold

Spot gold had remained mostly steady yesterday, buoyed by its safe haven appeal although a firm trend in dollar weighed on prices.

At the Multi Commodity Exchange, gold was seen retreating from its recent high as rupee started to regain some of its lost ground against the US dollar.

Sentiment in gold could be guided by the excise duty rollback on gold jewellery announced by the Finance Minister, Mr Pranab Mukherjee, in Parliament yesterday.

Base metals

In Shanghai, base metal complex declined with copper dropping more than one per cent. Tracking international market, base metals at MCX declined too, a report from Geojit Comtrade said.

Meanwhile, the London Metal Exchange remained closed for Early May bank holiday yesterday. Pressure seems to be building in the base metals market after some recovery witnessed during last fortnight.

Crude oil

Crude oil was seen recovering following an initial fall. Nymex crude oil was seen bouncing back after falling to a four-month low on weak jobs data and recent developments in the Euro Zone.

Rupee

The rupee appreciated by nearly one per cent against the US dollar. As the Finance Minister deferred the tax avoidance bill by another year, there was increased interest and inflow of dollars into the capital markets and the rupee rebounded. Similar trends can be expected today as well.

>cj@thehindu.co.in

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