Economy

Oil gains on a favourable outlook while bets on a hawkish stance by FED pressures Gold

Revival in global demand amid disrupted supply Continue to support Oil and Base metals
Oil gains dipped to 51.3 in the similar time frame down from 52 reported in May’21.

Oil gains despite lack of clarity on the production stance in the months ahead while a firmer Dollar weighs on Gold.

Oil gains: Spot gold ended the week with gains of 0.5 percent as wild spread of the Delta variant of COVID-19 boosted appeal for the safe haven, Gold. Extension of lockdown following the surge in infected cases in many regions of Asia, Australia and Europe hampered market sentiments.

The US Currency continued to appreciate post hawkish comments by the US Federal Reserve which limited the gains for the Dollar priced Gold. Markets kept a keen watch on the developments in the US economy for cues on the Federal Reserve’s monetary stance in the months ahead.

Expectations of a tighter monetary policy by the US might continue to weigh on the bullion metal; however, surge in the number infected case might continue to keep the prices in check in the week ahead.

Crude Oil

Last week, WTI Crude prices rose over 3 percent as depleting US Crude inventories and reopening of economies signaled towards a steady recovery in the global Oil demand.

As per reports from the Energy Information Administration, US Crude inventories dipped by 6.7 million barrel last week surpassing the market expectation of a 4.2 million barrel drop and reporting the sixth consecutive weekly fall.

Oil prices rose after a tentative deal between the Organization of the Petroleum Exporting Countries (OPEC) and allies to add back two million barrel per-day (bpd) from August to December. But the gains were soon revered after key member UAE objected to the easing production cuts and extending the output cuts past April’22.

While investors will wait for outcome of the OPEC meeting; tighter pandemic led curbs in Asia, Australia and Europe following the increase in the Delta variant cases might keep oil prices in check in the week ahead.

Base Metals

Lead was the highest gainer in the base metals spectrum while Copper ended lower in the week gone by on the LME. Lead prices gained on worries of potential shortage as the inventories in the warehouse monitored by LME plunged over 39 percent to 76775 tonnes in a span of about three months.

Aluminium rose about 2 percent following the persistent fall in stocks in the LME monitored warehouse. Along with the Along with severe production limitation in major Aluminium producing regions in China, Russia planning to impose exports duties on Nickel, Aluminium, Copper and steel products hinted towards a tighter supply market.

However, a stronger Dollar and slow growth in China’s industrial sector weighed on the base metal prices. In June’21, China’s official manufacturing Purchasing Manager’s Index (PMI) dipped to 50.9 from 51 reported in May’21 while the Caixin Manufacturing PMI (which tracks the small and medium scale industries) dipped to 51.3 in the similar time frame down from 52 reported in May’21.

Copper

LME Copper ended lower by 0.12 percent last week as high level of LME inventories and slowdown in China’s industrial sector pulled the prices lower.

This news is shared to Prittle Prattle News.

By Reporter

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