Caution prevailed over global commodity markets ahead of the European Union Summit. Investors were waiting for cues as to whether EU leaders will come out with a solid action plan to tackle the region’s financial crisis.

Euro remained stuck at a 21-month low against the US dollar ahead of the summit. Doubts over the EU leaders’ action and concerns that Greece may have to exit the Euro zone weighed on the market. Worries also persisted over Chinese economic growth.

Gold

Spot gold fell for the second day, stretching the previous session’s decline. However, with the rupee plunging to a new low in Indian markets, a steep decline in gold prices was restricted.

MCX gold was seen moving sideways, a report from Geojit Comtrade said. Rupee plummeted to a record low against the US dollar breaching Rs 56 a dollar mark.

Base metals

Base metal complex in Shanghai as well as at LME were in the red. LME copper slipped from a one-week high as worries over global economic growth intensified. Meanwhile, the World Bank’s cut in growth forecast for China, a top consumer of metals and energy, built further pressure over the market.

Crude

Crude oil dropped for the second consecutive day. Brent crude oil was floating near $107 a barrel while in Nymex, the prices slipped below $91 a barrel.

There was an expectation in the market that Iran may arrive at an accord with the UN nuclear watchdog over the nuclear issue. This was expected to ease concerns over supply disruptions and affected the sentiments on crude.

Worries over economic growth in China and persisting debt crisis in Euro zone also dragged down the prices. Moreover, crude oil inventories were seen rising for the ninth consecutive week in the US. Meanwhile, API data released yesterday also showed a rising trend.

>cj@thehindu.co.in

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