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Below are Quote On Gold and Base metals regain some of the lost ground By Mr. Prathamesh Mallya, AVP- Research, Non-Agri Commodities and Currencies, Angel Broking Ltd

Gold and Base metals regain some of the lost ground as the Dollar after US Federal Reserve Chair Jerome Powell eased worries over a sooner than expected rate hike.

Gold

In yesterday’s trading session, Spot gold ended marginally higher by 0.01 percent to close at $1778.7 per ounce. Gold prices continue to recover from past weeks losses as the Dollar dipped yesterday’s after the U.S. Federal Reserve Chairman Jerome Powell stated the rising inflation won’t be the sole determinant to change the interest rates. A softer US Currency made the Dollar denominated Gold cheaper for other currency holders.

Gold prices plummeted in the week gone by after the US Federal reserve hinted towards a slightly hawkish approach in the months ahead. Hike in interest rates increase the opportunity cost of holding non yielding bullion metal. FED Chair Powell also vowed the continue to supporting the labor market.

Gold also witnessed some bargain hunting after the recent fall which sent the safe haven assets prices below $1800 mark.

The US FED also increased their inflation projections for 2021 to 3.5%, exceeding their target of 2%. However, reports indicating the current price increase to be transitory element kept the yellow metal prices in check.

Crude Oil

On Wednesday, WTI Crude prices ended higher marginally higher by 0.03 percent to close at $74.2 per barrel. Oil prices continued to trend higher as reports suggesting gradual increase in Oil output by the Organization of the Petroleum Exporting Countries and allies (OPEC+) strengthened the demand outlook for the Oil market.

As per reports from the U.S. Energy Information Administration (EIA), US Crude inventories plunged about 7.6 million barrels surpassing the markets expectation of a 3.6-million-barrel fall hinting a solid recovery in demand.

The OPEC+ is returning 2.1 million barrels per day in the global markets from May’21 to July’21. Markets expected that the Oil producing group might further increasing Oil output from August’21 on signs of robust global demand.

The OPEC+ is expected to continue to ease the production curbs (imposed last year) as global economies reopen. The Organization of the Petroleum Exporting Countries and allies, known as OPEC+ is due to meet on 1st July’21.

Bets on a paced recovery following the vaccination drives around the globe and bleak prospects of return of Iranian Crude in the global markets also levied support for Oil prices elevated.

Base Metals

In Yesterday’s trading session, Base metals on the LME traded higher with Copper and Nickel gaining the most amongst the pack as a lower Dollar and upbeat factory activity in US underpinned the prices.

However, China announcing to sell metals from its national reserves to nonferrous processing and manufacturing firms through a public auction remained a considerable headwind for Base metals. China’s state reserve stated that it would auction 20,000 tonnes of their copper reserves, 30,000 tonnes of zinc reserves and 50,000 tonnes of aluminium reserves in the first week of July’21.

The global Zinc market landed in a deficit of 26,900 tonnes in April’21 falling from a revised surplus of 700 tonnes reported in March’21, data as per the International Lead and Zinc Study Group (ILZSG).

Copper

LME Copper gained about 2 percent to close at $9482.5 per tonne slightly recovering from the losses from the past week on the back of a softer Dollar.

As per reports from the General Administration of Customs, China’s exports of unwrought copper and copper products in May’21 stood at 79,044 tonnes, up over 3 percent from April’21 a and about 68 percent higher from a year earlier.

China’s Copper exports in the first five months of 2021 stood at 369,403 tonnes, up over 10 percent from a year earlier as increase in overseas demand while global economies continued to recover from the covid19 pandemic. However, increasing exports is also a sign of easing domestic demand which might keep investors cautious.

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