IGI Logo

Below are Quote On Industrial metals rose following optimism over the US infrastructure deal while Oil continued to trend higher on a positive outlook By Mr. Prathamesh Mallya, AVP- Research, Non-Agri Commodities and Currencies, Angel Broking Ltd

Gold prices remained under pressure following the mixed signs from the US Central Bank whereas Oil prices continued to move higher on bets of increasing fuel demand.

Gold

Spot Gold ended the week with marginal fall of 0.2 percent as mixed signs on the stance of the US Federal Reserve in the times ahead kept the markets cautious.

The fall in the precious metal was limited as the US infrastructural bill pressured the Dollar. Gold prices also found some support earlier in the week after U.S. Federal Reserve Chairman Jerome Powell stated that the rising inflation won’t be the sole factory behind any rate hike.

However, soon after FED Chair’s comments eased markets concerns, few FED officials projected a period of high inflation in the world’s largest economy. Prospects of a persistent increase in price levels reignited chances of a tighter monetary policy which kept the markets cautious.

The losses for the yellow metal were capped on bets on a potential inflation as it is widely considered as a hedge against inflation.

While prospects of shift in the monetary approach by the US central bank is expected to weigh on the Gold; mounting inflation concerns might keep the prices in check in the week ahead.

Crude Oil

WTI Crude rose over 4 percent in the week gone by as plummeting US Crude inventories and a promising demand outlook underpinned the prices.

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 indicating a solid recovery in demand.

The Organization of the Petroleum Exporting Countries and allies, OPEC+, is returning 2.1 million barrels per day in the global markets from May’21 to July’21. Markets expect that the group might continue to ease the production curbs imposed in 2020 following the paced vaccine distribution and reopening of global economies.

Base Metals

Base metals on the LME traded higher with Nickel posting the highest gains amongst the pack. Retreating US Dollar, solid US factory activity figures and optimism over the U.S. infrastructure deal boosted appeal for industrial metals.

Nickel prices soared following Indonesia’s move to limit construction of smelters producing Nickel Pig Iron (NPI) which raised worries of potential shortage of key stainless steel producing ingredient.

However, speculations over tapering of the expansionary policy by the US FED clouded the outlook for growth linked assets.

Also, 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.

Copper

Last week, LME Copper rose over 2.5 percent optimism over the US infrastructural deal and a weaker US Dollar supported the red metal prices.

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