Below is quote On Gold prices ended marginally higher by 0.08 percent to close at $1798.7 per ounce By Mr. Prathamesh Mallya, AVP- Research, Non-Agri Commodities and Currencies, Angel Broking Ltd
Commodities ease ahead of the US Federal Reserve Policy meet
Despite concerns of supply shortage due to floods in China and a weaker US Currency Industrial metals and Oil remained under pressure as markets were on the back foot cautiously awaiting for the US FOMC meets outcome.
On Tuesday, Spot Gold prices ended marginally higher by 0.08 percent to close at $1798.7 per ounce. The bullion metal scaled higher as the Dollar and the US treasury yield remained under pressure ahead of the Federal Reserve Policy meet.
Also, wide spread of the new variants of coronavirus raised threats of further slowdown in the global economic recovery which continued to hamper market sentiments in turn supporting gold.
However, markets cautiously awaited for cues on the US Central bank’s monetary stance in wake of the delta variant of the Covid-19 virus which kept a lid on the gains for Gold.
After the European Central Bank kept their stance accommodative and interest rates at record low levels in the recent meet, markets expect the same move by the US Central bank in order to support their economy.
Gold might remain steady in todays session as markets are expected to wait cautiously for the outcome of the two-day US Federal Reserve meet for hints on their stance in the coming months.
On Tuesday, WTI Crude ended lower by 0.36 percent to close at $71.7 per barrel despite of a weaker Dollar as worries over wide spread of the COVID-19 Delta variant continued to cloud the demand outlook for the global Oil market.
However, markets expect the global economic growth to sustain in the coming months which limited the fall in Oil prices.
Even the Organization of Petroleum Exporting Countries and their allies, also known as OPEC+ have announced to increase Crude supply by 400,000 barrels per day from August’21 to December’21 in order to meet the rising global crude demand in the months ahead.
Bets on decrease in the US Crude inventories and expectation of increase in global Oil demand might levy some support for Oil prices.
Officials US Crude inventory data will be published later in day.
MCX Nickel prices are down by 2.1 percent while Copper prices are down 1 percent in yesterday’s session in line with the international markets as investors turned cautious ahead of the outcome of US Federal Reserve meet.
Industrial metals gave up some of its gains made earlier in the week as any signs of a hawkish approach by the US FED officials at the end of the two days of policy meet (26th – 27th July’21) will impact the liquidity and the US Dollar.
On Tuesday, LME Copper dipped over 1 percent to close at $9758.5 per tonne ahead of the FOMC meet. Low level of LME inventories and severe flooding in China pushed Copper prices higher earlier in the week.
Markets kept a keen eye on the labor contract negotiations at Chile’s Escondida Mine, the world’s largest Copper reserve, which has been going on for a couple of months. The worker’s union have received a “final offer” by operator BHP on Monday, as per Reuters report. Worries over a potential strike or halt in operations at the world’s largest copper deposit would further hamper Copper supply chain and send the prices higher.
China planning to release its state reserves later this week and the US Federal Reserve might continue to keep the investors cautious.
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