Precious Metals Preview:
COMEX Gold futures soared to one and half week high of $1980 per ounce but fell thereafter as US dollar rose amid increasing risk aversion in the US trades. COMEX Gold tanked near $1950 per ounce mark and currently trades at $1946 per ounce, down 0.88% on the day. MCX Gold futures ended at Rs 51760 per 10 grams, up 0.70% on the day. Gold yet again moved up in line with the equities. In a related news, the US producer price index rose 0.3% in August, moderating from a surge of 0.6% in July, according to the Labor Department. Year over year through August, the PPI fell 0.2% after dropping 0.4% in the 12 months through July. While inflation has ceased to be a factor for Gold recently, the lower monthly figure weighed on the metal. A heavy slide of nearly 3% in WTI Crude oil also played spoilsport for Gold.
Base Metals Preview:
Copper fell sharply in last session. US stocks fell Thursday, as the rebound in tech ran out of steam, while signs of a slowdown in the labor market raised concerns about the strength of the recovery at a time when the Republican stimulus package failed to win enough votes in the Senate to ensure passage of another stimulus package. COMEX Copper fell under 3 per pound mark and saw accelerated selling thereafter. The metal tanked 2.50% to test one week low of $2.97 per pound before witnessing a pullback. MCX Copper futures closed at Rs 518.55 per kg, down 1.34% on the day.
Economic cues were mixed. The first-time claims for US unemployment benefits came in unchanged in the week ended September 5th, the Labor Department revealed in a report on Thursday. The report said initial jobless claims came in at 884,000, unchanged from the previous week’s revised level.
In a key update, the European Central Bank (ECB) decided to keep its monetary policy unchanged. The bank’s governing council decided to keep its key rate unchanged at -0.5%, and to keep buying assets under its Euro 1,350 billion pandemic-specific program without increasing the amount of its planned purchases. The ECB noted in a release after its ruling body’s meeting that rates would remain at their current level or lower until it has seen the inflation outlook robustly converge to a level sufficiently close to its target.
US crude oil inventories increased during the week ending September 4th, the US Energy Information Administration (EIA) said in a report on Thursday. According to the Weekly Petroleum Status Report, US commercial crude oil inventories, excluding those in the Strategic Petroleum Reserve, increased by 2.0 million barrels from the previous week, marking a first gain in seven weeks. At 500.4 million barrels, US crude oil inventories were about 14 percent above the five-year average for this time of year.
According to the EIA, total motor gasoline inventories decreased by 3.0 million barrels last week and were about 3% above the five-year average for this time of year. Finished gasoline and blending components inventories both decreased last week.
Distillate fuel inventories decreased by 1.7 million barrels last week and were about 20 percent above the five-year average for this time of year.
US crude oil refinery inputs averaged 12.8 million barrels per day during the week ending September 4, 2020, which was 1.1 million barrels per day less than the previous week’s average. Refineries operated at 71.8% of their operable capacity last week.
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