Market pulse for key metals and energy : Mangal Keshav

Gold futures edged higher in electronic trading, after closing out the regular trading session at a 1-week low, finding support after the US Federal Reserve on Wednesday afternoon made no changes to its bond-buying program.

Gold holdings of SPDR gold trust, the largest ETF backed by the precious metal, declined to 1,075.23 tons, as on May 2. Silver holdings of ishares silver trust, the largest ETF backed by the metal, increased to 10,452.5 tons, as on May 2.

In its policy statement, the Fed stressed that it was flexible, saying it was prepared to “increase or reduce the pace of its purchases,” commonly known as quantitative easing, depending on labor market or inflation changes.

The Dollar Index fell for the fifth day, as the Federal Reserve said it will maintain its bond buying at a pace of $85bn per month and is prepared to raise or lower the level of purchases as economic conditions evolve.

Copper futures extending their deepest monthly drop in almost a year in April, due to concerns over growth in top metal consumer China and in the United States, after data suggested the world's two biggest economies remain fragile.

Nickel prices joined copper in a bear market on concern that Chinese economy is slowing, which is likely to reduce demand of the metals from the world’s top user. Nickel touched its lowest level in nearly 4-years in broad-based selling.

Zinc stocks at LME warehouses declined for the 13th consecutive session to 1.06mn tons, down 13.5% on a y-t-d high in January.

Crude oil futures closed lower, for second straight session as rising worries about the outlook for energy demand combined with news of a hefty jump in US crude supplies, pushed prices down nearly 3%.

Brent oil fell more than 2% to close below $100 per barrel on Wednesday, as soft economic data from China stoked pessimism about the global demand outlook and as US crude oil inventory rose to record levels.

Crude stocks rose by 6.7mn barrels last week to a record 395.3mn barrels, Gasoline stockpiles last week fell 1.8mn barrels while stocks of distillates rose 500,000 barrels. Refinery utilization rose 0.9 percentage point to 84.4% of capacity - EIA.

Natural gas closed lower on Wednesday, handing back early gains as traders prepare for weekly data on US natural-gas stockpiles. Natural gas inventories are expected to increase by 28-30bn cubic feet, actual data will be released by EIA later in the day.