MUMBAI: Commodity markets witnessed increased volatility during European trade as the region's currency (Euro) reversed the declining trend vs the dollar. Commodity markets have been following the currency moves closely. Earlier during Asian trades, commodity markets treaded cautiously ahead of preliminary trade data. As expected the data showed surge in imports of copper, iron ore and other industrial commodities. Positive data from US triggered buying in leading commodity counters. However, these counters faced stiff resistance at higher levels.

US crude oil futures for April retreated to $81.65 a barrel, up 15 cents after reaching a high of $81.95 a barrel earlier. Last night API data showed a rise in crude inventory. Markets are now awaiting the official crude inventory data from EIA. There are expectations of a build up in gasoline and crude oil inventory which will push prices lower. Inventories of both crude oil and refined products in the US have swelled as the recession has reduced fuel consumption in the world's top consumer of oil.

Gold trended up after the euro bounced against the dollar. Spot gold was last at $1,124.75 an ounce, up $2.80 from
New York's notional close on Tuesday, when it dropped because of a resurgent dollar.

Bullion was about 2% below a six-and-a-half-week high near $1,150 an ounce hit in early March. US gold futures for April delivery was little changed at $1,121.5 an ounce. The world's largest gold-backed exchange-traded fund, SPDR Gold Trust, said its holdings stood at 1,116.120 tonne as of March 9, unchanged from the previous business day.

Base metal counters reversed losses last night as short-covering emerged. Metal price benefited from slight recovery in euro besides preliminary trade data showed marked increase in copper imports. Copper imports increased 10% in February from the previous month on firm demand.

Three-month copper on the London Metal Exchange (LME) rose $40 to close at $7,510 a tonne on Tuesday. In Asian trade the market ticked up to $7,564.00. Inventories remain a key support for copper. LME stocks have fallen for the last five sessions, their longest run of declines since since July last year. Inventories, at 538,875 tonne, are down 3% since peaking in mid February, and enough for about 10 days of global consumption.

Domestic commodity counters continued to experience choppy trades with investors adopting 'sale on rise' strategy. Further, the strengthening of the rupee supported the trading strategy. MCX crude oil futures for March settlement gyrated between Rs 3,722 and Rs 3,690 before retracing to current level of Rs 3,713 per barrel.

MCX Gold for April settlement last quoted at Rs 16,723 per 10 grams after moving between Rs 16,758 and Rs 16,692 per 10 gram. MCX Silver March settlement contract edged up to trade at Rs 27,084 per kg, after having touched a high of Rs 27,145.

Base metal counters too moved in a narrow range amidst upward bias. MCX copper for April settlement was last quoting 0.3% higher at Rs 343.65 per kg, after resuming the session at Rs 343.00. MCX zinc March contract added 0.8% to quote at Rs 107.65 per kg.