BULLION – Gold prices are holding at decent gains despite the dollar trading in a range against its major crosses. Consumer inflation grew at a slower pace but failed to have major impact on the greenback. The CPI rose 0.1% in May after a 0.3% rise in April, also on the domestic front inflation rose 3.05% as against the previous number of 2.99%. Yellow metal is getting support on lower levels as dispute between US and China remains unresolved. If there is no constructive resolution between the two leaders at the G20, the metal could further gain momentum as investors will look out for fresh safe haven buying. On the recent tussle, President Trump highlighted the point that use of tariffs is a part of his strategy and unless China does not agree on few major points the trade talks are going nowhere. President Trump keeps showing optimism on the same yet the deal keeps on getting extended and chaotic. Holdings of SPDR Gold Trust rose 0.5% to 759.70 tonnes on Wednesday from 756.18 tonnes on Tuesday.
ENERGY- Oil prices steadied in morning after plunging 4% in yesterday session to nearly five-month lows as a result of further buildup in crude stockpiles and worries about lower demand growth. EIA reported another build in inventories at 2.2 million barrels. EIA data also showed that gasoline inventories rose by 800,000 barrels against the expectations for a supply decrease of 3,80,000 while distillate stockpiles declined by 1 million barrels last week against expectation for a climb of 7,04,000. Alongside concerns about rising supply, ongoing trade tensions between the United States and China, the world’s two biggest oil consumers, weighed on prices. U.S. President Donald Trump reported he was holding up a trade deal with China. To add to the bearish sentiments, EIA short term outlooks forecasts shows that it estimates 2019 U.S. crude production of 12.32 million bpd, down 1% from May forecast. It also cut its 2020 output view by 0.9% to 13.26 Mbpd. For 2019, it lowered its WTI crude price outlook by 5.6% to $59.29 a barrel for WTI.
BASE METAL – Base metals are trading sideways over the last couple of session as lack of progress in resolving the U.S.-China trade tension continued to weigh on prices. But prices were cushioned by expectation of an interest rate cut by the U.S. Fed in the backdrop of slowing growth. Rapidly rising nickel supplies and slowing demand from stainless steel mills are weighing on prices of the metal, which are likely to come under further pressure this year as deficits disappear. China’s iron ore were under pressure after surging to record highs last week, but expectations of tight supply and brisk demand were seen intact, limiting the downside which will support Zinc and nickel prices. Providing additional support to prices was the demand outlook for steelmaking ingredients as China may roll out more infrastructure projects to support its slowing economy.
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