IGI Logo

Below are Quote On Oil and industrial metals gave up some of its gains on the first trading day of the week By Mr. Prathamesh Mallya, AVP- Research, Non-Agri Commodities and Currencies, Angel Broking Ltd

Increasing infected cases of the new virus variant paused the rally in Oil prices while slow growth in China’s industrial profitshampered the industrial metals.

Gold

On Monday, Spot Gold ended lower by 0.12 percent to close at $1778.2 per ounce. The bullion metals scaled lower following the marginal gains in the US Dollar.

However, lack of clarity on the US Federal Reserve’s approach in the times ahead kept the markets cautious.  Markets will continue to have a keen eye on the upcoming economic data for cues on progress in the US economy.

Gold prices sustained the significant losses from the earlier week after U.S. Federal Reserve Chairman Jerome Powell stated that rising inflation won’t be the sole factory behind rate hike decision.

Also, bets on steady increase in price levels hinted a potential inflation which also kept Gold prices afloat. The yellow metal is widely considered an hedge against inflation.

Crude Oil

Yesterday WTI Crude prices ended lower by 1.54 percent to close at $72.9 per barrel. Increase in the number of infected cases in Asia, Australia and Europe paused the rally in Oil prices on the first trading day of the week.

Oil traded higher earlier in the months as optimism over a promising outlook and plummeting US Crude inventories supported the prices.

However, extension of lockdown in major Oil consuming nations halted the long rally in Oil prices.

Markets will remain cautious ahead of the Organization of the Petroleum Exporting Countries and allies meet scheduled on 1st July’21 i.e. Thursday. The group 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 production curbs imposed in 2020 following bets on boost in fuel demand in the months ahead.

Base Metals

In Yesterday’s trading session, Base metals on the LME traded lower with Nickel posting the highest losses amongst the pack. A stronger Dollar and marginal growth in China’s industrial profits pressured the industrial metals

Soaring raw material prices dented manufacturing sector margins in May’21 and hampered growth in China’s industrial sector. In May’21, factory gains climbed up by 36.4 percent (yoy), after reporting a 57 percent growth in April’21.

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

LME Copper ended lower by 0.3 percent to close at $9388 per tonne as  slow growth in China’s industrial profits and high levels on inventories on the LME monitored warehouse outpaced optimism over the US infrastructural deal and pushed the red metal prices lower.

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