Gold edged lower whereas Oil continues to trend higher on expectation of boost in demand.
Rising US Treasury yield dragged Gold prices lower while Oil prices gained on a promising demand outlook.
Gold
On Tuesday, Spot gold prices ended lower by 0.32 percent to close at $1900.2 per ounce as the US Treasury yield edging higher denting appeal for the non-yielding bullion metals.
The fall in Gold was capped as the US Currency remained lower ahead of key US economic data scheduled later in the week making Gold more attractive for other currency holders. Markets will have a keen watch on the Unemployment claims and payrolls data by US for cues on the economic condition of the world’s largest economy.
Gold, widely considered as an inflation hedge, traded higher in the earlier session as the US consumer price index rose in April’21 following the reopening of US economy which hinted towards potential inflation.
Crude Oil
WTI Crude prices rose over 2.1 percent in yesterday’s trading session closing at $67.7 per barrel as easing of pandemic led curbs in major economies like US & China and robust growth in the factory activity around the globe improved the demand outlook for Oil.
Prices further strengthened after reports suggested that the Organization of the Petroleum Exporting Countries and its allies, OPEC+, will continue to ease the production cuts in the coming months as the group projected a solid demand recover.
OPEC+ pledged to add 2.1 million barrels per day from May’21 to July’21 by easing the production cuts despite the surge in covid19 cases in major Oil consumer, India.
OPEC and its allies are now scheduled to meet on 1st July 2021.
Base Metals
On Tuesday, Base metals on the LME remained under pressure despite the significant expansion in the factory activities in major economies on prospects of stalling demand from top metal consumer China.
The premium for the imported metal into China dropped to a multiyear low indicating towards weak demand in the world’s second largest economy which pressured the industrial metals.
Also, China’s official manufacturing Purchasing Managers’ Index (PMI) scaled lower to 51 (in the similar time frame) down from 51.1 reported in April’21 following the spike in raw material prices. However, the Caixin/Markit Manufacturing PMI which primarily focuses on smaller firms rose to 52 in May’21, up from 51.9 reported in April’21.
Eurozone’s Manufacturing PMI rose to 63.1 in May’21 (as per the its IHS Markit data) recording the highest figures since the inception of the survey in June 1997. However, soaring input costs coupled with supply curbs kept the growth in check. Even UK’s Manufacturing PMI rose to 65.6 in the similar time frame following a surge in new orders and easing pandemic led restriction.
Copper
LME Copper dipped about 0.1 percent to close at 10245 per tonne as weaker demand from China outpaced the supply threats for Copper and pressured the prices.