Some genuine concerns have arisen regarding the alarming increase of coronavirus cases and their effect on the market. Central banks across major economies have been infusing liquidity in the economies, having a sharp impact on prices of different commodities.
The second wave of coronavirus in several countries overwhelmed the market's sentiments because of the reinforcement of lockdown. And this has resulted in the rise of gold prices. Further stimulus infusion by global banks kept the prices of gold elevated last week. The Spot prices of the yellow metal ended 1.3% higher last week. Now the gold is charging towards the mark of $1800 as the virus triggered economic slowdown again.
The restrictions being imposed again almost everywhere because of the pandemic, the WTI prices of crude oil also ended up lower last week by 0.25%. The nations contributing the most significant amounts in the world's economy are suffering a massive blow of COVID-19 positive cases. Therefore the pandemic again led to the fall of demand for crude oil in the market.
According to the Energy Information Administration (EIA), the U.S crude oil inventory levels have surged to about 5.7 million barrels. The market is expecting the OPEC to declare about their production cuts after their next meeting because of the decreasing demand prospect of crude oil.
The base metal prices last week on LME ended high. Among all the base metals, last week Zinc topped being the highest gainer. In the past few months, the Zinc output of China was low. And the output of China's Zinc, which was already falling, was also affected because of the shipment delay from one of the world's largest miners, i.e., the Alaska located miner called Red Dog.
The industrial demand of China is pressurized due to the dip for the fifth month straight. Due to the virus's resurgence, the base metal prices might be supported by further infusion of stimulus by the global central banks.
Copper prices last week on LME had surged by 5%. This gave rise to worries of mounting supply from top copper producers. Chile being one of the top producers of copper, has uplifted the prices of the red metal.
The outlook of the industrial metal is uncertain and worrisome because of the reinstating of lockdown due to the rapid increase of coronavirus positive cases.