By Prathamesh Mallya, AVP – Research Non Agri Commodities and Currencies, Angel Broking Ltd
The primary concern of world governments remained set on how to take care of the citizens and ramp up healthcare facilities, and also restart manufacturing and production units to improve economic conditions. The threat of a more substantial second wave of the pandemic continued to loom sinisterly over several countries, including China.
On Thursday, spot gold prices ended flat closing at $1761.5 per ounce as dollar prices improved and gold became more expensive for other currency holders. However, worries over a second and more potent wave of the virus helped in keeping prices steady.
Furthermore, the market analysis showed that the economic recovery period post-pandemic will be over a much extended period than predicted earlier, and thus added to the steady situation.
On Thursday, Spot silver prices ended lower by 2.05 per cent to close at $17.9 per ounce. Prices on the MCX ended higher by 0.69 per cent closing at Rs.48116 per kg.
On Thursday, WTI Crude prices ended higher by 1.87 per cent closing at $38.7 per barrel as there was widespread resumption in economic activities in the major economies of the world. Many Asian, European and American nations have allowed their citizens to go back to work, and this has driven down the high rates of unemployment.
Oil prices further increased after the Organization of Petroleum Exporting Companies agreed to undertake aggressive production cuts since there was falling demand. This pragmatic step has pushed up the prices of Crude Oil.
However, according to reports from the Energy Information Administration, U.S. Crude inventory levels increased by 1.4million barrels in the week ending on 19th June’20. Rising U.S. Crude inventory levels indicate weak global demand and this factor weighed on market sentiments.
On Tuesday, base metal prices on the London Metal Exchange (LME) ended higher after the world economy headed towards a degree of normalcy.
Marginal improvement in U.S. employment data and signs of revival in the Eurozone were noted. In addition to this, signs of improved demand from the top metal consumer, China levied some support for the base metal prices.
However, increasing panic regarding the second wave of the coronavirus and fresh U.S-China tensions limited any further rise in the price.
On Thursday, LME Copper ended higher by 0.48 per cent to close at $5893 per tonne as steadily increasing cases of coronavirus raised fears of the shutdown of mines in Peru and other parts of the world. This factor led to fears regarding supply and pushed up prices.
Research facilities worldwide are competing to create a potential vaccine that can be safely tested and then administered to the entire population. Governments have to join hands with international and local agencies to tackle the problems of starvation, unemployment and disease.
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