Weekly Commodity Insights : Crude oil rebounded sharply, climbing over 6% last week - Axis Securities Ltd
The Week That Was
* Gold posted its strongest weekly gain of nearly 6% since March 2023, driven by heightened geopolitical tensions from the Russia-Ukraine conflict. Investors sought safe-haven assets even as the U.S. dollar remained strong. Meanwhile, a surprise drop in U.S. jobless claims tempered expectations for aggressive Federal Reserve rate cuts. Gold prices will likely remain volatile with key economic events on the radar, including U.S. preliminary GDP data and FOMC minutes.
* Silver rallied over 3.5% last week, underpinned by safe-haven buying in the broader bullion complex. However, its performance lagged gold due to continued weakness in industrial metals. Escalating global tensions added to market unease, with Russian President Vladimir Putin warning of an escalating conflict following Ukraine’s use of U.S. and U.K.-supplied weapons. On the monetary front, investors are carefully evaluating the Fed's next moves. Market expectations suggest a 60% probability of a 25-basis-point rate cut in December, though some anticipate a pause. These dynamics are expected to keep silver prices reactive to geopolitical and economic developments.
* Crude oil rebounded sharply, climbing over 6% last week. The intensification of the Russia-Ukraine conflict added a geopolitical risk premium, with Moscow ramping up its offensive in response to U.S. and U.K. support for Ukraine. Additional U.S. sanctions on Russia’s Gazprombank further underscored the geopolitical stakes. Adding to the narrative, China unveiled new trade-boosting policies aimed at supporting energy imports, which lent additional support to prices. However, mixed signals from global markets, including concerns over potential U.S. tariff policies, could maintain volatility in the energy space this week.
* Copper prices stabilized last week after enduring a sharp decline of over 5% prior to last week. Market sentiment remains cautious, weighed down by concerns over insufficient stimulus measures from China, the world's largest copper consumer. Additionally, policy uncertainties surrounding the U.S., including potential tariffs and inflationary risks under the new administration, are keeping traders wary. Looking ahead, key data points, including U.S. consumer confidence and China’s manufacturing PMI, will likely drive market sentiment. Investors are also closely watching China’s upcoming decision on its one-year medium-term lending facility rate for potential indications of further policy support.
For More Axis Securities Disclaimer https://simplehai.axisdirect.in/disclaimer-home
SEBI Registration number is INZ000161633
