Commodity Research Evening Track by Kotak Securities
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Commodities steady as investors wait for US inflation and job data
Comex Gold held a six-day decline to trade above $2,634 an ounce, as traders waited for US inflation data that may define Federal Reserve policy easing in the coming months. Bullion fell about 1.25% this week, as Treasury yields rose due to decreased expectations for a larger rate cut by the US central bank. Recent Fed minutes revealed that Chair Jerome Powell faced opposition to September's half-point rate hike, with some officials favoring a smaller reduction.
WTI Crude Oil edged higher to trade above $74 a barrel after a two-day decline as traders watched for an Israeli response to Iran’s missile attack early last week, while US crude stockpiles expanded the most since April. The Israeli-Iranian conflict and the potential for a retaliatory strike have created market volatility. Meanwhile, China's economic slowdown and lack of stimulus measures have dampened demand for oil. Despite these factors, oil prices remain relatively high, supported by hedge fund activity and concerns about global supply.
LME base metals hold steady on hopes that top consumer China will unveil further stimulus measures soon. Markets are speculating that finance officials will announce a major fiscal stimulus package at a press conference scheduled this weekend, which is expected to range between 2-3 trillion yuan. China’s central bank also opened a swap facility initially worth 500 billion yuan for financial institutions to fund stock purchases amid efforts to support the capital market. LME Copper trading moderately lower by 0.30% near $ 9,646 per ton while Aluminium is up 0.40%.
European natural gas prices swung between small gains and losses on Thursday as traders assessed the balance between supply risks in the Middle East and subdued demand prospects due to milder weather. Dutch futures, after a three-day decline, is trading steady on Thursday. Forecasters predict warmer temperatures following a cold spell, reducing heating demand and enabling utilities to increase Europe's already abundant gas reserves.
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