IGI Logo

Below are Views On Spot gold ended higher by 1.32 percent to close at $1751 per ounce By Mr. Prathamesh Mallya, AVP- Research, Non-Agri Commodities and Currencies, Angel Broking Ltd

Commodities scale higher after massive losses in the past week.

Worries over widespread of new delta variant covid19 virus and easing concerns over early tapering of the expansionary policy by the US central banksupported for Gold.

Gold

On Wednesday, Spot gold ended higher by 1.32 percent to close at $1751 per ounce. The bullion metal scaled higher in yesterday’s session as weaker than expected inflation data reduced bets on early tapering of the expansionary policy by the US Central Bank.

As per the Labor Department, US Consumer prices rose by 0.5 percent in July’21 after increasing by 0.9 percent June’21. Slower growth in CPI weighed on the Dollar and the US treasury yield which underpinned Gold prices.

Also, widening impact of the new Delta COVID-19 variant across borders continued to undermine market sentiments in turn boosting appeal for the safe haven, Gold.

Strong US economic data last week led to a revival in markets risk appetite in turn pushing Spot Gold prices below the $1800 level. However, threats over further slowdown in the global economic recovery as many nations impose fresh curbs following the surge in infected cases helped Gold put a pause to the recent fall in prices.

Weaker than expected US inflation data eased worries over early tapering by the US Central bank which might continue to support Gold prices.

Crude Oil

On Wednesday, WTI Crude ended higher by 1.41 percent to close at $69.3 per barrel as prices continued to recover from the massive losses witnessed in the earlier week.

WTI Crude prices found some support earlier in the week as strong US economic numbers and increasing gasoline consumption supported market sentiments.

However, US prompting the Organization of the Petroleum Exporting Countries and its allies (OPEC+) to increase Oil output kept the gains in check.

Also, a lower-than-expected fall in US Crude inventories further weighed on Oil prices. As per reports from the U.S. Energy Information Administration, Crude inventories dipped by 447,000 barrels in the week ending on 6th August’21 against the markets expectation of a decrease of 1.3 million barrel.

US urging the OPEC to increase production amid mounting concerns over the wide spread of the new delta variant of covid19 virus might weigh on Oil prices.

Base Metals

On Wednesday, most Industrial metals on the LME traded higher as lowering expectations of sooner than expected tapering by the US Central Bank weighed in the Dollar.

 Also, optimism infused by the US infrastructure bill underpinned the demand outlook for industrial metals. The US senate passed President Joe Biden's $1.2 trillion infrastructure plan earlier this week taking the bill towards the final passage, the House of Representatives.

Copper

On Wednesday, Copper prices ended marginally lower by 0.09 percent to close at $9512 per tonne as the supply concerns for Copper ease. The BHP Group and the labor union at Escondida mine struck a tentative deal on Tuesday after months of negotiations which took some pressure off the Copper supply chain.

The ongoing labor negotiations in several mines of Chile had raised genuine supply concerns in the global Copper market in time of booming demand. However, the tentative deal at the Escondida Mine, world’s largest Copper deposit, has averted the worries over a potential strike which dragged the prices lower.

Fading worries over early tapering by the US Federal Reserve and a disrupted supply chain might continue to support the base metals complex in the days ahead.

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