Commodity Research Evening Track by Kotak Securities
Commodities advance ahead of Key US Data
COMEX Gold held an advance ahead of this week’s key US economic data, which is forecast to support the case for rate cuts this year. Bullion hovered around $2,412 an ounce after rising 0.5% Tuesday, just days before the personal consumption expenditures data that’s the Federal Reserve’s preferred underlying inflation measure. US PMI figures for July to be released today, second-quarter GDP figures will follow on Thursday and the latest PCE price index report is due on Friday.
WTI Crude Oil rose, snapping a losing streak, as industry data showed US oil stocks declined for the fourth week in a row. Brent rose above $81 per barrel after declining nearly 5% in the previous three days, while West Texas Intermediate crossed $77. The American Petroleum Institute, which is supported by the industry, reported a 3.86 million barrel drop in stockpiles, with a similar drop at the Cushing, Oklahoma, terminal.
LME base metals continue to trade sideways to lower as China's economy is struggling due to a crisis in the housing market and consumer reluctance to spend. LME Copper prices slipped again on Wednesday, and were hovering around a three-and-a-half month low hit in the previous session, amid demand concerns in top consumer China and a risk-off sentiment. According to preliminary data from the ICSG, the global refined copper balance showed a preliminary surplus of approximately 416,000 tonnes from January to May 2024. LME copper dropped 0.01% to $9,161.50 per metric ton while Zinc and Nickel is down by 0.2% and 0.60% respectively.
European natural gas rose as much as 2.3% on Wednesday, trading at around €32 per megawatt hour as traders weighed an improving supply forecast with pockets of growing demand elsewhere. Several Indian buyers have entered the market to purchase cargoes for August to October, and Egypt is looking for extra-liquefied natural gas to address persistent shortages.
Today's release of flash Manufacturing and Service PMIs will be watched for clues about the health of the global economy, allowing traders to seize shortterm chances in the precious metal.
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