Commodity Morning Trading Guide | Globe Capital
07-Jul-2022
Commodity Morning Trading Guide

Energy counter can extend its selling pressure as fear of global recession is denting its demand.

Report Overview

Bullions
Gold prices edged up on Thursday from nine-month lows touched in the previous session, after the dollar paused its rally, alleviating pressure on greenback-priced bullion. A deteriorating inflation situation and concern about lost faith in the Federal Reserve’s power to make it better prompted U.S. central bank officials to rally around an outsized interest rate increase and a firm restatement of their intent to get prices under control, minutes of the June 14-15 policy meeting showed. The head of the International Monetary Fund (IMF) on Wednesday said the outlook for the global economy had “darkened significantly” since April and she could not rule out a possible global recession next year given the elevated risks.

 

Base Metals:
China restarted some idled copper smelting and refining capacity over the 2nd quarter of the year, which is likely to help increase the supply of refined copper over the coming months. Data from Platts show that spot TC/RC in China have dropped to around US$73/t at the end of June compared to a peak of around US$85/t in April, reflecting the higher availability of smelting capacity. Reports suggest that the quarterly premium for aluminium shipments to Japan has dropped to US$148/t for the third quarter (compared to US$172/t for 2Q22) as demand from the automobile sector softened largely due to semiconductor chip shortages and logistical issues on account of Covid-related lockdowns in China.

 

Energy:
Oil prices witnessed lower level buying as its clawing back some of Tuesday’s heavy losses as supply concerns returned to the forefront and outweighed lingering worries over a global recession. Oil prices have seen a knock from a resurgent dollar, which is holding at a 20-year peak against the euro and multi-month highs against other major peers. And the Norwegian government on Tuesday intervened to end a strike in the petroleum sector that had cut oil and gas output, ending a stalemate that could have worsened Europe’s energy crunch. Meanwhile, Kazakhstan to tackle the impact of restrictions on oil exports via the Caspian Pipeline Consortium (CPC), which ships Kazakh crude via Russia to the Black Sea.

 

 

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