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Oil steadies while gold cuts its gains

Highlights:

  • ENERGY:
    Brent oil futures climbed by 3.35% or $2.30 to $71.05. Meanwhile, WTI crude advanced by 2.89% or $1.90 to $67.54.
    October natural gas was trading with a decrease of 0.20% or $0.008 at $3.908.
  • METALS:
    Spot gold dipped by 0.5% to $1,793.80 per ounce.
    Silver futures for December traded at $23.71.
    Copper contracts for September delivery traded with an increase of 0.52%, at Rs 720.30 per kg.
  • AGRICULTURAL:
    The price of soybeans advanced by $15.8 to $491.3. Corn gained more than 2 dollars to $214.2.

Oil keeps climbing 

Crude oil extended gains on Wednesday supported by positive demand expectations. US regulator issued the first complete approval for one of the coronavirus vaccines.

Oil prices rose more than three percent during trading on Tuesday. and WTI crude exceeded the level of $65. As of today, Brent oil futures climbed by 3.35% or $2.30 to $71.05. Meanwhile, WTI crude advanced by 2.89% or $1.90 to $67.54. According to analysts, if the US benchmark exceeds a level of $69 that will be a bullish signal that could send oil towards the $70 level. To a large extent, the price move will depend on the US dollar. The Jackson Hole Symposium is held this week and could mark the evolution of the North American currency. 

On the other hand, oil has already performed a good rally, but the market still needs to see more confirmations.

Data from the American Petroleum Institute showed a decline in crude oil and fuel stocks in the United States over the past week. Two market sources, quoting figures from the American Petroleum Institute, said Tuesday that crude stocks slumped by 1.6 million barrels during the week ending August 20. Meanwhile, gasoline stocks dropped by one million barrels. 

Distillate stocks, which include diesel and heating oil, decreased by 245,000 barrels.

Natural gas slips on reducing demand 

Natural gas futures were flat on Wednesday after recovering from early session losses. However, sentiment remains weak following Tuesday’s bearish performance. Yesterday, after a promising start to the session, prices winded down at the close after the latest weather forecasts showed that conditions would be closer to average.

October natural gas was trading with a decrease of 0.20% or $0.008 at $3.908.

Even though temperatures through the weekend are forecast to set seasonal records in some areas, natural gas futures traders are showing little reaction to the news. Probably it’s because forecasts usually take 10-15 days. Those weather predictions right now point to the pattern shifting to more normal conditions.

Meanwhile, spot gas prices resumed rising amid widespread heat and humidity across the country. In particular, the national average for spot gas from Natural Gas Intelligence climbed by 6.5 cents to $3,995.

NatGasWeather forecasts suggest earnings will be limited

According to NatGasWeather for August 25-31, high pressures in upper layers continue across the central, southern, and eastern US with very warm highs 80 and 100 degrees F. 

Warm high pressures will weaken next week with pleasant highs of the 70s and 80s over the north and east of the US. In general, the national demand will be high until the weekend, and then it will decrease.

Gold price slows its recovery

gold and silverGold slipped below $1,800 on Wednesday after jumping by 1.4% on Monday. The drop in the yellow metal prices resulted from the dollar halting its slide. Meanwhile, investors are seeking cues on the monetary policy tapering from this week’s US Fed meeting.

Spot gold dipped by 0.5% to $1,793.80 per ounce. At the same time, gold futures lost 0.7% at $1,795.60.

The members of the Federal Reserve have no reason to change the attitude they have maintained in recent months. They remain watchful but wait until they have the necessary information to make the best possible decision to achieve their objectives.

The employment report will be published next week, which is one of the key announcements. All the members of the Federal Reserve have indicated that it is necessary to see a solid recovery in the labor market before beginning to tighten monetary policy.

The gold market will also be monitoring the evolution of coronavirus cases. As mobility restrictions will be lifted, the possibility of an increase in economic activity will be higher. 

As long as the economic figures do not give clear signals, the gold price movement will be erratic. Investors will find reasons to buy or sell depending on the most recent information, even though that information does not generate significant changes in the medium term.

Silver keeps falling

Silver keeps falling despite its rally the last couple of days. Silver futures for December traded at $23.71. Analysts expect the white metal to continue falling in the near term. However, if the price action suggests reversal that can change. 

 

Spot demand boosts copper prices

Copper prices increased by 0.52% on Wednesday in the futures market.

On the Multi Commodity Exchange, copper contracts for September delivery traded at Rs 720.30 per kg. According to analysts, it is due to the pick-up in the spot demand for the red metal.

The price of soybeans rises strongly in the Chicago market

The price of soybeans advanced by $15.8 to $491.3 after oil and petroleum prices increases. 

On the other hand, corn gained more than 2 dollars to $214.2. Analysts stated that t6he increases in oil provided support. Meanwhile, the forecasts indicate high temperatures and some rainfall in areas of the Midwest in the coming days.

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