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All eyes were on Brussels on Wednesday as European ministers met to discuss about the prospects of Greece. Metal traders remained confused on the fate of major industrial metals on contradictory events governing the markets. Barring Nickel other metals were mostly on the sidelines.
On one hand, Europe crisis resurfaced after Moody's downgrade of France credit rating on the contrary US economy continued to resurge. The much talked term fiscal cliff was subsided a bit by the reports of better housing starts last night.
US census bureau reported a rise of 3.6% in the US housing starts in October to 0.894 million. The expectations were of a 3.7% decline. This was highest level of housing starts since July 2008.
Housing starts for September were revised down to 0.863 million units from a previously reported 0.872 million units. Meanwhile, building permits issued in October fell 2.7% to a seasonally adjusted 0.866 million, compared to expectations for a decline to 0.865 million.
In Japan, trade deficit has depicted a gloomy picture as exports fell sharply lower. Japanese exports were also reported to have plunged 6.5% amid tension between Japan and China.
Poor Japanese trade data is negative for Yen, as it increases the odds of more easing from the Bank of Japan. After the data yen tested a seven month low of 81.72 against the Dollar. The trade deficit hit 549 billion yen ($6.72 billion)
The US Dollar dwindled between gains and losses against the Euro before closing lower on Tuesday. The greenback tested a low of 1.2828 and a high of 1.2763. US currency settled at 1.2816, down 0.04%. The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, inched down by 10 pips to 80.89.
LME Copper was almost sideways in Asian trades, trying to gather analyze the confusing situation. Copper three month forwards were trading at $ 7743 per tonne, compared to $ 7750 per tonne on Tuesday. MCX Copper settled at Rs 427.7 per kg. Metal broke its 100 EMA and tested a high of Rs 429.8 per kg.
LME Nickel settled at $ 16360 per tonne yesterday and is now up by $ 85 per tonne at $ 16445 per tonne. Nickel has slipped sharply lower from February 2011 levels of $ 29000 per tonne on fading steel demand.
This year Nickel has whipped 11% of its value in 2012. The prices were at $ 18420 levels at the beginning of this year. Higher production of stainless steel and rise in inventories due to lower demand has affected Nickel negatively.
MCX Nickel tested a one week high on the back of short covering in the current month contract. Stainless steel material Nickel tested a high of Rs 918 per kg before settling at Rs 909 per kg, up 1.2%.
LME Zinc was down by $ 18 per tonne at $ 1916 per tonne on Wednesday. MCX Zinc ended last session at Rs 105.05 per kg, down 0.4%.

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Gold futures recovered its yesterday’s losses in Asia trades today taking cues from strong equities and weak Japanese Yen.
In Asia, Japan’s Nikkei Stock Average led the regional gains, as it has in a string of recent sessions, rising 1% in early moves. South Korea’s Kospi gained 0.4%, but Australia’s S&P/ASX 200 fell 0.2%. The rally in Tokyo came as the yen hit a seven-month low against the U.S. dollar, and also fell sharply against the euro.
Weak Japanese trade data released 10 minutes ahead of the stock-market open helped exacerbate the yen’s fall. The Finance Ministry reported a 6.5% year-on-year drop in Japanese exports, fueled by another tumble in shipments to China, amid tensions between the two nations. Driving the drop in exports was an 11.6% fall in exports to China, Japan's top trading partner, as a territorial dispute between the two continued to stoke tensions.
December dated gold futures are trading up $1.6 at $ 1725.1 per ounce on COMEX division of New York Mercantile Exchange. The counter may face a resistance near $1735 levels today.
Euro-zone finance ministers on Wednesday failed to reach an agreement on conditions to release the next tranche of financial aid for Greece. The leaders will meet again on Monday to continue the discussions, according to reports. The euro dropped on the news, sliding to $1.2756 from around $1.2812 immediately before the announcement was made.
MCX December gold futures may open today’s session near Rs 31770 levels with resistance near Rs 31840 levels and support near Rs 31700 levels.

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Gold futures remained shaky as the US dollar extended gains against the single currency and as the U.S. equity futures retreated after Euro group finance ministers failed to agree on conditions to release a tranche of financial aid to Greece.
The euro which was trading above the $1.28 handle before the announcement, suffered a sharp fall to change hands at $1.2751. U.S. equity futures also retreated, with Dow Jones Industrial Average futures down 55 points, or 0.4%, at 12,704.
Sentiment was dampened after Eurogroup finance ministers, who had been locked in a meeting in Brussels to decide on conditions to release the next tranche of financial aid for Greece, failed to reach an agreement.
“The Eurogroup interrupted its meeting to allow for further technical work on some elements of this package,” Eurogroup President Jean-Claude Juncker said in a statement. The Eurogroup now plans to reconvene on Monday
COMEX December delivery gold futures are trading up $ 1.2 at $ 1724.8 per ounce in early London trades today.
On the data front today, Japan's trade deficit narrowed in October, though by less than forecast, as exports fell on another sharp drop in shipments to China. The trade deficit hit 549 billion yen ($6.72 billion) as exports fell 6.5% from a year earlier, and imports decreased by 1.6%, the Finance Ministry said Wednesday.
MCX December gold futures are trading up nearly Rs 30 at Rs 31771 per 10 grams. The counter may face a resistance near Rs 31840 levels today.

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New European passenger car registrations continued their downward trend, falling for the twelfth straight month in September. Demand for new cars was down 10.8%, amounting to 1,099,264 units, compared with September 2011. Nine months into the year, the downturn reached 7.6%, with a total of 9,368,327 new cars registered in the EU.

In September, the EU recorded a total of 1,099,264 new cars, or 10.8% less than in the same month a year ago. Looking at the major markets, the British was the only one to expand, while Germany (-10.9%), France (-17.9%), Italy (-25.7%) and Spain (-36.8%) all faced a double-digit downturn according to Brussels-based European Automobile Manufacturers' Association, or ACEA

From January to September, the EU market shrank by 7.6%, compared to the first nine months of 2011. Results were diverse across markets, as the UK posted growth (+4.3%), while Germany saw its demand fall by 1.8% and Spain (-11.0%), France (-13.8%) and Italy (-20.5%) contracted more severely.