Gold ends lower: Revival in the risk appetite of global investors and bets on increasing global Oil demand helped Oil recovery from the massive losses made earlier in the week.
Gold ends lower: In Yesterday’s session, Spot Gold ended lower by 0.4 percent to close at $1803.3 per ounce. Spot Gold hovered near the lowest in the week as boost in the risk appetite amongst global investors dented the appeal for the safe haven, Gold.
Global investors were alarmed following the surge in the Delta variant COVID-19 infections. Bets on extension of lockdown in many nations which might derail the economic recovery weighed on the market sentiments.
However, Gold ends lower the revival in the global equity markets and bond returns in yesterday’s session after the sell off earlier in the week shifted the investors away from Gold.
Also, soaring Oil prices and possibilities that the inflation being transitory element added to the downside in Gold prices. Investors will have a keen watch on the U.S. Federal Reserve officials meeting in the coming week and the European Central Bank meeting on Thursday.
On Wednesday, Gold ends lower WTI Crude prices rose over 4.2 percent to close at $70.3 per barrel despite the increase in the US Crude inventories. Crude prices surged after the massive fall earlier in the week as markets risk appetite improved.
As per reports from the Energy Information Administration, US Crude inventories rose by 2.1 million barrels in the week ending on 16th July’21. The gains for Crude were limited as US Crude Inventories edged higher last week after eight consecutive weeks of withdrawals.
Oil prices plunged over 7 percent in the beginning of the week as the Organization of Petroleum Exporting Countries and their allies, also known as OPEC+ agreed on increasing Crude supply by 400,000 barrels per day from August’21 to December’21.
Further pressuring Oil prices was the Delta variant of COVID-19, which is significantly more contagious than earlier ones and is now the dominant strain worldwide. It has been detected in about 100 countries around the world and patchy rollouts of inoculation programs in many countries are undermining the battle against the virus, raising the prospect of more lockdowns that would hit demand for oil products.
Industrial metals on the LME remained under pressure in yesterday’s trading session following China’s announcement to release another batch on industrial metals in an attempt to ease the soaring Commodity prices. After the successful first round of China’s State Reserve metal auction held in the first week of July’20, China’s National Food and Strategic Reserves Administration announced to sell 30,000 tonnes of copper, 90,000 tonnes of aluminium and 50,000 tonnes of zinc of their reserves in the second sale scheduled on 29th July’21.
Lead prices found some support in yesterday’s session after a major Lead smelter situated in Western Germany (Stolberg smelter) halted operations following severe flooding. The unit has a production capacity of 155,000 tonnes, according to its website.
As per data from the International Nickel Study Group (INSG), the global Nickel market deficit rose to 21300 tonne in May’21 from a 20400 tonne deficit reported in April’21.
On Wednesday, LME Copper ended marginally higher by 0.12 percent to close at $9347 per tonne as the amount of the sale of reserves was lower than expected.
As per data from the International Copper Study Group (ICSG), the global refined Copper market deficit expanded to 75,000 tonnes deficit in April’21 after a 13,000-tonne deficit reported in March’21.
For further information: Sachin Kulaye 9867036368, Value360 Communications.
By Mr. Prathamesh Mallya, AVP- Research, Non-Agri Commodities and Currencies, Angel Broking Ltd