MCX Gold prices rally on risk-off sentiments, copper prices at highest levels since January, US crude oil inventories at record levels, and the US economy may shrink by 6.5% this year

08th Jun – 12th Jun

1. US Crude oil inventories rose to a record level of 538.1 million barrels last week

Jun 11, 2020

US crude inventories rose unexpectedly by 5.7 million barrels for the week ending June 5, to 538.1 million barrels. US Crude oil inventories rose on account of higher imports, as supplies were boosted by Saudi Arabia flooding the market in March and April. The EIA released the US weekly inventory report on Wednesday.

Source: Reuters

2. US Fed expects the unemployment rate to reach 9.3% this year

Jun 11, 2020

The US Federal Reserve has said that US unemployment is set to reach 9.3% at the end of 2020, as the economy is affected by the coronavirus pandemic. Rising jobless numbers are keeping gold prices higher, and crude oil prices lower recently.

Source: Bloomberg

3. US economy will shrink by 6.5% this year, and may grow 5% next year: Fed

Jun 11, 2020

The Federal Reserve expects the economy to shrink by 6.5% this year, due to the impact of the coronavirus pandemic. The US economy is expected to grow by 5% next year. The Federal Reserve released these estimates in its bi-monthly reports on Wednesday. Gold prices rallied after the Fed meeting statement.


4. Copper prices rose to their highest levels since January on improved demand

Jun 10, 2020

Copper prices rose to their highest levels since January, supported by firm demand, and a drop in warehouse inventory. On-warrant LME copper stocks fell to their lowest levels since February 24 at 130,225 tonnes, while Shanghai Futures Exchange copper inventories were at their lowest levels since January 17.


5. SHFE Lead inventories double in one week

Jun 12, 2020

Lead inventories in warehouses tracked by the Shanghai Futures Exchange (ShFE) more than doubled over the past week, on the back of higher production, and due to demand remaining subdued in China. Lead stocks in ShFE warehouses jumped by 118.5% over the week to 19,716 tonnes, from 9,021 tonnes a week earlier. The lead stock rose to their highest levels, since the week ended March 20.

Source: Reuters

6. MCX Gold prices rallied this week on risk-off sentiments

Jun 11, 2020

Gold prices in India traded higher, following weakness in the Indian rupee, and a strong rally in CME futures contracts, after the US Federal Reserve’s comments on the US economy. The Fed kept the rate unchanged, and the bleak growth forecast of the economy boosted safe-haven appeal. US Fed Chairman Jerome Powell has reassured to take every possible step to support economic recovery.


7. India’s decision to extend import restrictions on Pulses has been objected by Australia, EU and US

Jun 12, 2020

India’s decision to extend import restrictions on peas, lentils, beans, and other pulses by another year till March 31, 2021 has been objected to by many trading partners, such as Australia, the EU, and the US on the grounds that it is no more a temporary measure, and should be removed. India produced 23.40 million tonnes of pulses during the 2018-19 crop year (July-June), against an estimated demand of 26-27 million tonnes.

Source:Business Line