By: Mr. Prathamesh Mallya, AVP- Research, Non-Agri Commodities and Currencies, Angel Broking Ltd.
The strengthening of the U.S. Dollar dented the Spot Gold prices while supporting the prices of base metals. The appreciating Dollar might further weigh down the yellow metal and industrial metal prices. Crude Oil traded higher Hurricane Sally hits the U.S. Gulf coast, impacting U.S. oil production. The weak demands for the crude, however, capped the prices.
Spot Gold ended marginally lower by 0.04% at $1955.5 per ounce as the U.S. Dollar strengthened on Tuesday. However, the expectations of a dovish stance by the U.S. Federal Reserve boosted the demand for the yellow metal.
Worries over the Brexit deal further supported spot Gold prices. The European Union’s demands the UK for withdrawing the Internal Market Bill by the end of this month are due to be voted in the commons’ house
Investors shifted towards the safe haven, Gold amid optimism over the deal between the U.S. Congress and the White House negotiators, and by a low-interest rate environment and hopes of economic recovery.
The strengthening of the U.S. Dollar might further weigh down the gold prices.
WTI Crude ended higher by 2.74% at $38.3 per barrel after a storm hitting the U.S. Oil capacities overshadowed the demand concerns triggered by the pandemic. More than one-fifth of the U.S. offshore oil capacities were shut due to Hurricane Sally.
Oil prices were weighed down as Commander Khalifa Haftar ordered the Oil facilities in Libya months after the lockdown. It is believed that Libyan Oil production would add millions of bpd to the global Crude market.
OPEC, which is scheduled to meet its allies on 17th September to discuss the global oil market’s current scenario, reported that the worldwide Oil demand is expected to fall by 9.46 million bpd in 2020.
Bleak demand prospects for the liquid metal is likely to further dent and cap Oil prices.
LME Base Metals ended positive on account of recovery in the U.S. Dollar. Strengthening of the U.S. and China’s industrial activities limited losses for base metals.
China’s increase in sales and industrial activities in August’20 indicated strongly towards economic recovery. According to the National Statistics Bureau, China’s industrial output rose by 5.6%. The country’s Primary Aluminum output went up by 2.3% in August.
Fresh loans disbursed by China further supported industrial metal prices. The loan disbursement was increased to support the revival of the economy. The loans sanctioned in August were 29% higher than those in July’20.
LME Copper ended lower by 0.5% at $6761.5 per tonne weighed down by appreciating Dollar and bleak growth prospects.
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