BULLION – Gold prices rose by 0.4 percent last week over expectation of rate cut by the U.S. Federal Reserve. Slowdown in the global growth amid weakening of the US economy might pressurize the FED to trim the rates which weighed on the US Dollar & in turn support Gold prices. Markets will have a keen watch on the next meeting of the US FED policymakers which is to be held on June 18-19, 2019. U.S. & Mexico struck a deal last week, side stepping a possible trade war and averting chances of an economic slowdown capped the gains for Gold. However, escalating trade tension between U.S. & China coupled with rising global uncertainties continues raise worries over the global economic growth and push investors to take shelter under the bullion metal. China stated that it wont come under any pressure and enter in to a contract forced by U.S. which further worsened the trade situation between the super power nations.
ENERGY-Crude dipped by 3.0 percent last week as escalating tension between US & China and surge in US Crude inventory levels weighed on the prices. As per reports from the U.S. Energy Information Administration (EIA), Crude inventories surged by 2.2 million barrels last week against the markets expectation of a decline of over 480,000 barrels. Moreover, the biggest consumer of Crude, China, imported crude around 40.23 million tonnes in May 2019 down from an all-time high of 43.73 million tonnes in April 2019. The fall in imports came following the drop in Iranian imports caused by U.S. sanctions and refinery maintenance coupled with falling domestic demand. The downtrend was limited after fresh supply concerns rose from the Middle East as two oil tankers were attacked in the gulf of Oman. This is the second attack on one of the worlds key shipping routes. Meanwhile, China’s officials stated that Washingtons attempt to force Beijing into a trade deal wont be successful; they wont come under any pressure from the United States which further escalated trade tension.
BASE METAL – Last week, base metals on the LME traded positive except for Zinc which declined by 0.2 percent. Rising demand for Alloy in the market led to an uptrend in the prices of Nickel which was the highest gainer amongst the pack last week. However, trade tension between US and China continues to hamper the global demand prospects for Industrial metals. U.S. President Donald Trump and Chinas President Xi Jinping will meet at the G20 summit in Osaka on 28-29 June, 2019. After the meeting U.S. President will decide whether to impose duties on the remaining Chinese goods. However, U.S. President Trump added that he had a Feeling that a U.S.-China trade deal could be reached. But if there is no deal then he the situation might worsen. China’s officials stated that Washingtons attempt to force Beijing into a trade deal wont be successful; they wont come under any pressure from the US.
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