Commodity Research Evening Track by Kotak Securities Ltd
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Commodities hold steady ahead of key US inflation report
Comex Gold prices remained stable below $2,690 as recent US economic data continues to point to a robust economy and assess the monetary policy outlook. However, it is headed for a third weekly gain after setting successive record highs on optimism the Federal Reserve will maintain an aggressive pace of interest-rate cuts this year.
WTI Crude Oil steadied after a two-day decline below $68 a barrel, but remained on track for a significant weekly loss on prospect of increased oil supply from Saudi Arabia and Libya, coupled with the resolution of a political dispute in Libya, contributed to the downward pressure on prices. Moreover, Saudi Arabia's commitment to higher production and Libya's progress towards resolving the central bank issue signaled a potential increase in global oil supply, weighing on prices.
LME base metals are holding gains as Chinese stimulus boosts and signs of US economic resilience boots demand prospects. US economy grew 3% in the second quarter and jobless claims fell more than expected to four-month low, easing concerns of an economic downturn. Prices also gained support from People’s Bank of China’s 0.5 percentage point reduction to the reserve requirement ratio.
European natural gas down about 2% on Friday following two days of gains as discussions regarding the continuation of gas flows through Ukraine gained traction that boosted optimism that a deal could be reached to maintain transit after the current agreement expires at the end of the year. Despite Friday’s decline, prices are heading for their biggest weekly advance since early August amid supply concerns.
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