Global commodity markets broadly eased last week having been driven by weak external markets and some concerns over the macroeconomic situation. The jobless claims in the US of course helped ease the concerns to an extent.

Crude markets were largely range-bound. While the rising possibility of release from strategic reserves capped the upside, constructive fundamental supported against downside risks.

As for base metals, there continue to be conflicting near-term demand signals torn between improving global macro data and softness in Chinese import demand. Precious metals continued to be under pressure with the possibility of further quantitative easing becoming increasingly remote and physical demand in major markets coming under strain.

Last week also saw the Indian jewellery makers suspend their strike after 20 days following some assurance e from the Finance Minister that their genuine concerns over excise duty would be looked into.

But the buzz in the market is that many jewellers were fed up with the prolonged inaction and apprehended that they would lose out on marriage season demand and auspicious Akshaya Thrithiya falling on April 24.

Gold: The precious metals market continues to show vulnerability. In London, gold PM Fix on Thursday was $ 1,631 an ounce, slightly up from the previous day's $ 1,621/oz. Silver bucked the trend with AM Fix of $ 31.27/oz versus previous day's $ 31.98/oz.

The precious metals complex, especially gold and silver, are vulnerable to downside price risks in the near term. While investor interest has been lacking, physical demand has been tepid. In India, falling international prices have been neutralised by weakening rupee.

According to technical analysis, retracement support in the 30/30.50 area provides buying support for silver. The focus is higher on 33.30/34.50. Gold is likely to base above 1,580 and a move over 1,700 will target the 1,800 range highs. The medium term outlook is neutral.

Base metals: China's spot demand is soft and seasonal demand in Q2 is expected to be tepid, according to anecdotal evidence.

However, consumption data from the US are encouraging. So, the market seems to lack conviction about direction, torn as it is between near-term Chinese weakness and overall global positive macro picture.

Technically, the picture is that copper is likely to be underpinned near 8,245 for a move toward 8,765. Above that would confirm upside potential to 9,000/9,200. Aluminium looks bearish with move below 2,070 pushing to 2,040. Medium term outlook is range-bound.

>gchandra@thehindu.co.in

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