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Below are Quote On Gold and Base metals whereas Oil continued to gain of bets of increasing demand in the coming months By Mr. Prathamesh Mallya, AVP- Research, Non-Agri Commodities and Currencies, Angel Broking Ltd

Inflation jitters reignited worries over a sooner than expected rate hike which weighed on Gold and Base metals whereas Oil continued to gain of bets of increasing demand in the coming months.

Gold

On Thursday, Spot gold ended lower by 0.2 percent to close at $1775.2 per ounce. The bullion metal was pressured following mixed signs on the US Federal Reserve’s monetary approach in the coming months.

Soon after the U.S. Federal Reserve Chairman Jerome Powell calmed worries over a sooner than expected rate hike, two FED officials projected a period of high inflation in the world’s largest economy. Persistent increase in price levels might prompt towards a tighter monetary stance which kept the markets cautious.

However, Gold also found some support on bets on a steady increase in price levels as it is widely considered as an hedge against inflation. The US FED increased their inflation forecasts for 2021 to 3.5%, exceeding their target of 2% in the recent policy meet.

Crude Oil

On Wednesday, WTI Crude prices ended higher marginally higher by 0.3 percent to close at $73.3 per barrel. Oil prices remained elevated following a drag down in US Crude stocks and prospects of increasing global fuel demand.

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 Organization of the Petroleum Exporting Countries and allies, known as 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 which points towards a favorable outlook for the global Oil markets. The OPEC group is due to meet on 1st July’21.

Base Metals

In Yesterday’s trading session, Base metals on the LME ended mixed with Nickel posting the most gains amongst the pack. Investors were alarmed as bets on steady rise in inflation reignited worries over a sooner than expected rate hike which might cloud the outlook for Base metals.

Even the gains for Dollar were capped following the mixed signs by the US Federal reserve on its stance going ahead.

China’s move to sell metals from its national reserves to nonferrous processing and manufacturing firms through a public auction also kept the prices in check. China’s state reserve announced 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.

Copper

On Thursday, LME Copper ended lower by 0.7 percent to close at $9419 per tonne as mounting inflation worries and stalling demand from China undermined the red metal prices.

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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