Metal prices have moved up in the past month amid expectations of a revival in global demand, following positive economic data reported by developing and developed economies.
While zinc prices on the London Metal Exchange (LME) jumped 5.76 per cent to settle on Tuesday at $2,193.5 a tonne, lead followed suit and recorded a gain of 2.13 per cent to reach $2,129 a tonne. Both copper and aluminium, however, remained volatile and closed with a marginal gain of less than one per cent in the period. Copper and aluminium settled on Tuesday at $7,015 a tonne and $1,837.5 a tonne from the level of $6,995.5 a tonne and $1,823.5 a tonne, respectively, a month ago.
“China's manufacturing PMI in June expanded at the fastest pace in 2014. Also, favourable manufacturing data from the euro zone followed by estimates of favourable manufacturing data from the US in the evening session is helping the recovery in the base metals complex,” said Naveen Mathur, associate director (commodities and currencies), Angel Broking. Positive manufacturing data from China acted as a positive factor. Spain’s Manufacturing Purchasing Managers’ Index (PMI) increased by 1.7 points to the 54.6 mark in June against a rise of 52.9 level in May. The euro zone unemployment rate fell to 11.6 per cent in May from 11.7 per cent a month ago.
India’s HSBC Markit Manufacturing PMI rose marginally to 51.5 in June as against 51.4 in May. Both gold and silver prices in rupee terms shot up by 3.66 per cent and 8.73 per cent to Rs 28,300 per 10g and Rs 44,850 a kg, respectively. Amar Ambani, head of research, India Infoline, said the better than expected auto sales numbers, positive cues from Asian and European markets and the rupee’s strength against the US dollar lifted the sentiment.
India’s factory activity expanded in June at its quickest pace since February.
In case of bullion, dollar index at six week lows, break of key technical level, and bargain buying are the possible factors for rally. Besides, Investment in SPDR gold trust seems to have regained in last couple of weeks, pushing the yellow metal higher, said Mathur.