By Mr. Prathamesh Mallya, AVP- Research, Non-Agri Commodities and Currencies, Angel Broking Ltd.
The world’s largest economy continues to be hampered due to the pandemic. The resurgence of the coronavirus has slowed down the market conditions. All sectors of the market continue searching for a way of recovery post-pandemic. However, experts claim that the pandemic caused trigger has slowed down, and revival of the market will soon take place.
Gold
Spot gold on Thursday ended higher by 0.68 per cent to close at $1942.6 per ounce as exposed economic outlook amidst surge unemployment claims in the U.S. helped in shifting the investors towards the haven, Gold.
The minutes of the meeting of the U.S Federal Reserve Policy held on 28th and 29th July’20, signalled towards a rough path for the recovery as the pandemic impact continues to broaden. The need for additional stimulus support by the U.S. Federal Reserve was raised by the policymakers which strengthen the gold prices.
Gold prices found some support due to investment from Warren Buffett’s Berkshire Hathaway in major gold miner Barrick.
Crude Oil
WTI Crude ended lower by 0.82 per cent to close at $42.6 per barrel on Thursday as persistent weakness in the U.S. economy and worries over desolate economic viewpoint weighed on the Oil price.
The revival of covid-19 virus slowed the recovery in the oil markets, which were already shackled, which undermined the prospects of crude. U.S. policymakers show concerns over the economic outlook and possible surplus in the oil markets pushed crude prices lower as per the reports.
U.S. Crude inventory levels dropped by 1.6 million barrels which led to the downfall of oil prices which was limited in the week ending on 14th August’20.
China’s state-owned Oil companies have booked tankers to carry barrels of almost 20 million of U.S. Crude in August’20, and September’20 as per the U.S. oil traders, shipbrokers, and Chinese importers’ report. The depreciating dollar and demand increase from China limited the downfall in Crude prices.
Base Metal
The LME Base Metal prices on Thursday ended lower. This was because the market sentiments were weighed down due to the cautious outlook given by the Federal Reserve policymakers. Uncertainties continue to loom over U.S.-China relations as the review of the phase one trade deal was postponed reflecting the growing rift.
The production of global Primary Aluminum surged from 5.292 million tonnes to 5.452 million tonnes in July of 2020. In the same frame, China’s output also rose from 3.03 million tonnes to 3.131 million tonnes as recorded last month.
According to the reports from International Lead and Zinc Study Group (ILZSG), the surplus of the global Zinc market dropped from 19000 tonnes recorded in May of 2020 to 2000 tonne in June of 2020.
Copper
The LME Copper prices on Thursday ended by 1.25 per cent to close at $6601.5 per tonnes. The prices of LME inventories were pushed lower because of the overshadowing worries revolving around the recovery of the economic conditions.
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