Gold prices can witness some lower level buying after the recent fall as weaker local currency to assist prices on domestic bourses.
Gold prices slipped on Thursday, as Treasury yields and the dollar rose, with bullion’s outlook hurt by fears the Federal Reserve could go for a more aggressive interest rate hike this month, after data showed U.S. inflation sky-rocketed in June. U.S. annual consumer prices jumped 9.1% in June, the sharpest spike in more than four decades, leaving Americans to dig deeper to pay for gasoline, food, healthcare and rents. The Fed is seen ramping up its battle with sky-high inflation with a supersized 100 basis points rate hike at its upcoming policy meeting on July 26-27. A rallying dollar sent gold prices to a near one-year low on Wednesday following the inflation report, but a retreat in the greenback helped bullion make a sharp recovery and end the session higher. SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.17% to 1,019.79 tonnes on Wednesday from 1,021.53 tonnes on Tuesday.
Copper prices fell to a fresh 20-month low as an elevated U.S. dollar, renewed COVID-19 restrictions in top consumer China and fears of rapid interest rate hikes stifled demand. Investors also held back from making large bets ahead of data out of China scheduled for release on Friday to determine the health of the world’s second-largest economy. China’s imports of copper rose 15.5 % from month ago to 537,698.1 tonnes in June, data from the General Administration of Customs showed. The International Monetary Fund on Tuesday again cut its growth forecast for the United States to 2.3% for 2022 from 2.9% in late June. China’s refined zinc output stood at 490,300 mt in June, down 24,900 mt or 4.84% MoM and 17,700 mt or 3.48% YoY. From January to June 2022, the combined refined zinc output was 2.973 million mt, a decrease of 1.49% year on year.
Oil prices fell below $100 per barrel recently as US inventory data showed buildups in crude oil and refined products amid rising fears of a global economic slowdown. The global oil market is “walking a tightrope” between scarce supply and the possibility of a recession, the International Energy Agency (IEA) stated recently, with higher prices and worsening economic conditions already taking a toll on demand. Still, its demand outlook for 2022 was trimmed by just 200,000 barrels per day (bpd) and is set for an annual rise of 1.7 million bpd and 2.1 million bpd in 2023, when it will reach 101.3 million bpd led by growth in developing countries. OPEC producers Saudi Arabia and the UAE will have a limited ability to pump more oil, the IEA warned, with their combined spare production capacity set to fall to 2.2 million bpd. in August.
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