By Prathamesh Mallya, AVP - Research Non Agri Commodities and Currencies, Angel Broking Ltd
The main concern of corporate firms and governments worldwide remained set on how to tackle the economic crisis and focus on ramping up healthcare and testing facilities. The second wave of the coronavirus erupted in parts of China and raised fears of a worldwide resurgence.
On Monday, Spot Gold prices ended marginally higher by 0.2 percent, as there was a manifold increase in coronavirus cases worldwide.
The steady spike raised worries over a protracted and extended economic recovery period and boosted the appeal for the safe-haven asset, gold.
However, positive trade and economic growth data were generated by the world's two biggest economies and limited the increase in the cost of the yellow metal. As per the Institute for Supply Management (ISM), U.S. service activities soared to 57.1 in June '20 from 45.4 in May '20.
On Monday, WTI Crude rose marginally higher, closing at $40.6 per barrel percent as businesses in the U.S and China reopened, and favorable trade growths were noted.
The oil prices were supported after the OPEC, and its allies decided to continue the aggressive and pragmatic production cuts in the following months to cope with falling demand worldwide. In June '20, OPEC Oil production figures dropped to its lowest in about two decades, reflecting the more significant output cuts by Saudi and other Gulf countries.
However, uncertainties surrounding the treatment of coronavirus and possibly deadlier mutations in the following months limited the rise in crude oil prices.
On Monday, base metal prices on the London Metal Exchange(LME) ended higher, with Nickel being the highest gainer amongst the pack.
According to government reports, China's Purchasing Manager's Index (PMI) dipped to 50.6 in May '20 from 50.8 recorded in April '20. In addition to this, robust developments were recorded in the U.S manufacturing and service sectors, which improved the prospects for industrial metals.
However, U.S-China tensions continued to persist with President Donald Trump blaming Chinese laboratories for apparently creating and spreading the virus.
On Monday, LME Copper ended higher by 1.85 percent to close at $6128.5 per tonne as mines in significant export countries reopened, and there was an increase in demand from the top metal consumer, China.
World governments should invest in research and try to conduct human trials and develop a potent vaccine quickly. This will ensure that the world economy heads towards a degree of normalcy. Meanwhile, issues of unemployment, starvation, and disease have to be tackled tactfully and efficiently.