IGI Logo

Below is quote On Gold steadywhile Oil continues to regains lost ground By Mr. Prathamesh Mallya, AVP- Research, Non-Agri Commodities and Currencies, Angel Broking Ltd 

Revival in the risk appetite of global investors and bets on increasing global Oil demand helped Oil recovery from the massive losses made earlier in the week.

Gold

On Thursday, Spot Gold ended marginally higher by 0.2 percent to close at $1806.7 per ounce. Revival in markets risk appetite and bond returns during the week coupled with soaring Oil prices and possibilities that the inflation being transitory element kept Gold under pressure during the week.

However, the yellow metal found some support in yesterday’s session as the number of new unemployment claim in US came in higher-than-expected hinting towards a weak labor market in the world’s largest economy.

The yellow metal was further supported as the returns on US Treasuries retreated after the auction of the $16 billion in 10-year TIPS was bit at record low.

The European Central Bank keeping their stance accommodative and interest rates at record low levels in the coming month so as to support the economy and boost inflation is also expected to be supportive for Gold.

Crude Oil

On Thursday, WTI Crude prices rose over 2.3 percent to close at $71.9 per barrel as bets on surge in global demand following the recovery in global economies helped Oil extend gains from the earlier session.

The Organization of Petroleum Exporting Countries and their allies, also known as OPEC+ agreed on increasing Crude supply by 400,000 barrels per day from August’21 to December’21 so as to meet the ease prices and meet the increase in Crude demand.

US Crude inventories rose by 2.1 million barrels to 439.7 million barrels in the week ending on 16th July’21. The US Crude Inventories edged higher last week after eight consecutive weeks of withdrawals capping the gains for Crude Oil.

Base Metals

Industrial metals on the LME traded higher in yesterday’s session as boost in markets risk appetite and bets on increasing demand following the recovery in global economies underpinned the prices.

 Further supporting the Base metal prices was a softer US Dollar. The greenback retreated from a multiyear high making the Dollar denominated Industrial metals cheaper for other currency holders.

Lead prices continued to trade higher after a major Lead smelter situated in Western Germany (Stolberg smelter) halted operations following severe flooding. The unit has a production capacity of 155,000 tonnes, according to its website. Increasing demand from US & Europe amid worries of tighter global Lead market led to the recent increase in prices.

As per data from the International Nickel Study Group (INSG), the global Nickel market deficit rose to 21300 tonne in May’21 from a 20400 tonne deficit reported in April’21.

Copper

On Thursday, LME Copper ended higher by 1 percent to close at $9441.5 per tonne as plummeting inventories on the LME monitored warehouse and improved risk appetite kept the red metal prices elevated.

Above views are of the author and not of the website kindly read disclaimer