Commodity Research Evening Track by Kotak Securities Ltd
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Gold firms ahead of Powell speech
COMEX Gold rose above $2,532 per ounce ahead of a speech by Federal Reserve Chair Jerome Powell, which could reveal new hints about the central bank's monetary policy course. It jumped 0.7%, offsetting previous day 1.1% fall, as traders worried they had overstated the likelihood of rapid Fed easing before the end of the year.
Swaps pricing shows that traders are unsure whether to expect three or four 25-basis-point cuts across the remaining Fed policy meetings this year. Powell’s address later Friday at the annual Jackson Hole symposium in Wyoming could shed further light on the rate-cut trajectory, with lower rates generally positive for non-interest bearing bullion. (Bloomberg)
WTI Crude Oil recovered some of its weekly losses as markets advanced to trade near $73.70 ahead of Federal Reserve Chair Jerome Powell's Jackson Hole address, which may provide hints about the course of US interest rates. This week's data showed US manufacturing falling at the highest pace this year, along with hints of labor market weakening. In Europe, futures for diesel, a workhorse industrial fuel, have fallen to their lowest level in 14 months.
LME base metals gain on concern about output worries and global demand sentiments improves. LME Zinc headed for its highest weekly rise since April to trade 1.75% high at $2907 after China’s smelters announced actions that are likely to mean decreased output in the world’s top supply. Copper and aluminum prices are also expected to rise this week, as global demand turns positive.
European natural gas prices are set to fall for the week, as traders believe there will be enough gas for the winter, despite recent fluctuations. Prices have dropped from a 2024 high after Ukraine's attack on a key gas transit point in Russia. Europe is heading into the colder months with inventories almost completely full and flows from top supplier Norway are stable ahead of a heavy period of maintenance later this month.
Investors are now focusing on Powell's address later in the evening and New Home sales.
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