Commodity Research Evening Track by Kotak Securities
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Commodities edge higher as traders keenly await key US data
COMEX Gold steadied on Tuesday as traders look for upcoming US economic data that will clarify when the Federal Reserve might cut the interest rates. The manufacturing PMI data on Monday suggests a potential cooling of inflation, aligning with last week's PCE report that indicated a continued diminishment of inflationary pressures and a trajectory closer to the Fed's 2% target.
According to the World Gold Council, central banks bought a net 10 tonnes of gold in May, a drop of 56% from April, which is well below the 12-month average of 42 tonnes.
WTI Oil traded near a two-month high after breaking out of its recent trading range on an escalation in tensions in the Middle East and concerns over the rapid start to the Atlantic hurricane season. Israel’s military said 18 soldiersinjured in a drone attack by Iran-backed Hezbollah, one of them seriously, threatening to move the conflict closer to a full-scale war. Brent crude traded near $88 a barrel after rising Monday, while West Texas Intermediate was above $84. (Bloomberg)
LME base metals trading positive on signs of improving China demand. Copper prices rose on Tuesday supported by stock withdrawals in South Korea relieved some oversupply pressure and as signs emerged of improving demand from China. At the LME Gwangyang warehouse in South Korea, 8,000 tons of fresh warrant cancellations in LME copper warehouses signaled that inventory is likely to be shipped out soon. Benchmark copper on the LME was up 0.85% at $9,685 a metric ton. LME Nickel and Zinc trading higher by 0.43% and 1.01%.
European natural gas prices steadied as market participants assessed the impact of heat waves and natural disasters around the world on the region’s balance of supplies. Benchmark futures swung between small gains and losses on Tuesday to hold above €33 a megawatt-hour. (Bloomberg)
For the week, US ISM PMIs, Jobs data, FOMC meeting minutes and comments from Fed chair Jerome Powell will be in spotlight. The Minutes will shed light on why committee members lowered their expectations for 2024 rate cuts, even as they left their growth and unemployment forecasts unchanged.
Today, markets will look for speech by Fed Chair Jerome Powell and US Jolts jobs openings data for commodity directions.
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